Opec said 2016 has been the turning point towards a more balanced oil market.
In its 2016 World Oil Outlook report, the group said the market has “shown signs that it is heading towards a more balanced situation” since last December.
However, volatility has continued and challenges remaining on several fronts, the report said.
Crude prices dropped below $30 a barrel to reach a 13 year low in January, but have since rallied, hovering around the $50 mark.
In terms of supply, non-Opec production has contracted this year, while demand has stayed strong at about 1.2million barrels a day.
The report’s authors said: “Contributing to this more optimistic, albeit cautious, sentiment is the behaviour of oil stocks.
“Despite the current exceptionally high level of stocks, the pace of the build-up has clearly decelerated in 2016.
“In addition, the sharp decline in oil upstream capital expenditure investment experienced in 2015 has slightly decelerated in 2016.
“Moreover, in some specific areas, investment is even coming back in a watchful fashion compared to last year.
“Overall, it can be said that, despite its fragile state, the oil market is in the process of readjusting.”
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