IEA Sees Signs Oil Price 'Might Have Bottomed Out'

The oil price may have finally bottomed out, the International Energy Agency (IEA) said Friday, noting its "remarkable recovery" over recent weeks.

Recent sharp gains in the oil price, taking it to around $40 per barrel now from $28.50 in mid-January, do not necessarily mean that the worst is over, the IEA said in its monthly oil market report.

"Even so, there are signs that prices might have bottomed out," it said.

Among factors for higher prices are talks among producers launched by Saudi Arabia, Venezuela, Qatar and Russia to freeze production which the IEA said amounts to "a first stab at co-ordinated action that is intended to stabilise prices" with the presumed aim of pushing oil up to $50 a barrel.

The outcome of negotiations is, however, uncertain and a big supply overhang in the oil market means it would have little impact in the months ahead, the IEA said.

Among other factors keeping a lid on oil supply, Iran's return to the market following the lifting of Western sanctions in January has been "less dramatic than the Iranians said it would be", the IEA said.

"Provisionally, it appears that Iran's return will be gradual," said the 29-nation agency that provides analysis on global energy markets.