There has been an oversupply of oil from booming US output in recent years, thanks to the spread of fracking.

Meanwhile, members of the oil-producing cartel Opec have been reluctant to cut supply in order to “put a floor” under the the oil price, for fear of losing market share against higher-cost producers.

These two factors sent oil prices tumbling at the end of 2014 and throughout 2015.

Lower demand for oil from China, the world’s second-largest consumer of commodities, has also hurt oil prices and prompted fears of a global economic slowdown.

Many of the major oil firms have reported dramatic falls in profits and cut back billions of pounds in investments in exploration, while at least 5,000 jobs have been lost in the North Sea oil industry over the last 18 months.

Prices hit a 12-year low in January, but have since recovered to about $40 per barrel after leading Opec nation Saudi Arabia and top non-Opec producer Russia said they could freeze output.

Brent crude on Friday was 1.9% higher at $40.79, while US West Texas Intermediate oil was 2.5% higher at $38.77 per barrel.

The IEA said Opec output fell by 90,000 bpd in February because of production outages in Nigeria, Iraq and the United Arab Emirates, which lost a combined 350,000 bpd.

“Meanwhile, Iran’s return to the market has been less dramatic than the Iranians said it would be; in February we believe that production increased by 220,000 bpd and provisionally, it appears that Iran’s return will be gradual,” the IEA said.

Iran has promised to add as much as one million bpd to global supply after securing a deal with the West in January that has seen the easing of international sanctions, imposed on the Islamic Republic over its nuclear programme.

Looking for “equalization”

The IEA said inventories in industrialized part nations of the Organization for Economic Co-operation and Development (OECD) had declined in February without precedent for a year, albeit rough in skimming stockpiling expanded.

“At costs, there might be light toward the end of what has been a long, dim passage, however we can’t be unequivocally certain when in 2017 the oil business sector will accomplish the quite wanted parity. It is clear that the present course of travel is the right one, despite the fact that with far to go,” the IEA included.

While interest for oil achieved a close to five-year high amidst 2015, provoked by lower costs and nations, for example, China and India developing stockpiles, it has hindered fundamentally since the begin of the year.

What’s more, the IEA cautioned: “The dangers to worldwide oil request development are in all likelihood on the drawback.”

It said it anticipated that request would be level in the US, the world’s biggest buyer of oil, this year.

What’s more, it said interest could debilitate “if costs keep up their late upward force”.

Request in China was figure to develop by 330,000 bpd this year, well beneath the 10-year normal of 440,000 bpd.

“We expect India and other littler non-OECD Asian economies and the Middle East to give the majority of the 2016 development. The establishments for worldwide interest development are sound, however not shake strong,” the IEA said.