In its latest Oil Market Report (OMR) released on Friday, the agency said that disruption in the production levels of these three countries saw a cut in oversupply to the tune of 350,000 barrels per day.
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Both US and Brent crude prices are up from than 40 per cent from this year’s lows.
Sharp decelerations in demand growthparticularly in the United States and Chinapulled global growth down to a one-year low of 1.2 mb/d in the fourth quarter of last year compared with the year earlier dramacally below the near five-year high of 2.3 mb/d in the previous quarter.
The International Energy Agency said Friday prices have “recovered remarkably” in recent weeks, because of supply outages in Iraq, Nigeria and the United Arab Emirates, and signs that non-OPEC supply is falling faster than expected.
Russian, Venezuelan, Qatari and Saudi Arabian oil ministers failed to agree a cut in negotiations last month, settling on tentative plans to freeze output.
Goldman also trimmed its 2016 West Texas Intermediate (WTI) price forecast by $7 to $38 a barrel, and its 2017 price forecast by $2 to $58 a barrel.
Overall, though, the agency is bullish: “There are clear signs that market forces… are working their magic and higher-cost producers are cutting output”, it said.
“We reiterate our view that oil prices need to remain low for longer, as the oil and capital market rebalancing are only beginning”, Goldman said in its report.
The IEA, which monitors energy market trends for the world’s richest nations, is warning that the recent jump in prices should not be taken as a “definitive sign that the worst is necessarily over”.
On Monday, Norbert Ruecker, the Head of Commodities Research at Swiss private bank Julius Baer said that the company “still believes that oil prices experience a short-term bounce but no long-term recovery” while analysts at Barclays said that market optimism is “somewhat premature”.
Copper, zinc and lead paced gains in London, climbing at least 1 percent.
Bob Yawger, of Mizuho Securities USA, highlighted the lift from the European Central Bank’s decision Thursday to unleash further stimulus for the ailing eurozone economy.
And oil? Bubbling crude is now up nearly 4% for 2016.
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Brent settled up 34 cents, or almost 1 percent, at $40.39 a barrel.
