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Oil prices have dropped by nearly 60 percent
since June as production around the world has soared,
outstripping demand at a time of lackluster global economic
growth.
The International Energy Agency (IEA) said the market could fall
further before it recovered, but there were already signs lower
prices were beginning to curb production in some areas,
including North America.
"How low the market's floor will be is anybody's guess. But the
sell-off is having an impact," the IEA said in its monthly
report on Friday. "A price recovery - barring any major
disruption - may not be imminent, but signs are mounting that
the tide will turn."
"A rebalancing may begin to occur in the second half of the
year," the agency added.
Brent crude futures for March jumped to a high of $50.16, up
$2.49 from Thursday's close, when the front month was the
expired February contract. Brent later eased back and was
trading around $49.70 by 1215 GMT. U.S. crude traded at $47.35 a
barrel, up $1.10.
Analysts said Brent, which traded steadily above $48 a barrel
before the IEA's announcement, also had strong technical
support.
"The market seems ready to embrace a counter-movement following
the dramatic slump observed in recent weeks," said Carsten
Fritsch, senior oil analyst at Commerzbank in Frankfurt.
"We envisage a noticeable price recovery in the second half of
the year."
Despite the price gains, oil was volatile after Switzerland
jolted traders by abandoning its currency cap on Thursday. The
move triggered the euro's biggest ever one-day drop against the
Swiss franc and an 11-year low against the dollar.
"Potential dollar strength into 2015 may be another factor at
play in pressuring oil prices lower. The weakness in the crude
space is likely to keep sentiment jittery," OCBC bank said in a
report.
In China, a key source of global oil demand, there were signs of
weakness as the central bank announced new support measures
after data showed a drop in bank lending and foreign investment
growth falling to a two-year low.
(Additional reporting by Henning Gloystein in Singapore; Editing
by David Evans and William Hardy)
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