According to the International Energy Agency, oil prices may have passed their lowest point.
Declines in production and supply are what IEA is pointing to: non-OPEC countries will produce 750,000 barrels a day less in 2016, and supplies in Iraq, Iran and Nigeria are lower than previously. Higher-cost producers are reducing outputs.
“There are signs that prices might have bottomed out,” said IEA in its report this month. The statement is something of a turnaround from the month previous, when IEA said crude could sink further in a market with so much oil supply.
“For prices there may be light at the end of what has been a long, dark tunnel.”
Two months ago in January we saw a 12-year low in oil prices, but since then prices have recovered 50 percent.