IEA Says Crude May Have Bottomed Out

CBJ — The International Energy Agency says a host of factors are driving oil prices higher and it can’t come soon enough for oil producers, including many companies in Canada, and specifically Alberta, which has had its economy rocked by the downturn.

However, a large physical glut remains. Goldman Sachs is warning that U.S. crude could saturate storage in coming months.

The International Energy Agency said in a monthly report that that low prices were beginning to impact crude output outside producer organization OPEC.

“There are clear signs that market forces … are working their magic and higher-cost producers are cutting output,” the Paris-based IEA said.

The group, which co-ordinates energy policies of industrialized nations, said it now believed non-OPEC output would fall by 750,000 barrels per day (bpd) in 2016 compared to its previous estimate of 600,000 bpd.

It also said Iran’s post-sanctions return to exporting was happening more gradually than expected, keeping its barrels from putting significant pressure on the market. Iran said it would not participate in any production freeze until it had regained market share.