oil market rebounds on iea repor

London: World oil prices rebounded Friday after the International Energy Agency declared there were signs “the tide will turn” following recent multi-year lows.In early afternoon London deals, Brent North Sea crude for delivery in March rallied $1.41 to trade at $49.68 per barrel. US benchmark West Texas Intermediate for February gained $1.09 at $47.34.”How low the market’s floor will be is anyone’s guess,” the Paris-based IEA energy watchdog said in a monthly report published on Friday.”A price recovery — barring any major disruption — may not be imminent, but signs are mounting that the tide will turn.”Crude futures have more than halved since June, crashing on stubborn worries over global oversupply and weak demand in a faltering world economy.The IEA cautioned Friday that prices were expected to keep falling in the short-term.”The IEA have hedged their bets somewhat by saying the tide may turn,” noted CMC Markets analyst Michael Hewson.He added that the “market is very oversold and was probably due a rebound”.European benchmark Brent had tumbled Tuesday to $45.19 per barrel, hitting the lowest level since March 2009.The IEA added Friday that the dramatic collapse in oil prices was still insufficient to stimulate crude consumption, because weakness in the economy has cancelled out the benefits of cheaper crude.The agency maintained its oil demand forecast for 2015, expecting it to grow by 0.9 million barrels a day to reach 93.3 million barrels.The oil market rebounded Friday after plunging the previous day on news that the Organization of Petroleum Exporting Countries had overproduced in December, while it also cut its global demand outlook.The 12-nation OPEC cartel, which produces about one third of global supplies, said in a monthly report Thursday that its production rose to 30.2 million barrels a day in December, above its 30 million limit.It also projected that demand for its oil would fall to 28.8 million barrels per day this year from 29.1 million in 2014.”The yo-yo effect of the crude oil prices can be attributed to the uncertainty in the market,” said Shailaja Nair, associate editorial director at energy information provider Platts, pointing to an “unstable dollar” and an “irregular equity market”.”OPEC has just forecasted a drop in demand for its oil this year and this could mean that the price rally we saw this week is unlikely to last,” she said.Despite the global supply glut, OPEC decided in November to maintain its collective output ceiling at 30 million barrels of oil per day.Cartel kingpin Saudi Arabia has stated that OPEC will not cut production even if the price drops to $20 per barrel, in a move aimed at hurting US shale oil producers. (AFP)