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 IEA chief Fatih Birol said low oil prices had cut investment by
about 40 percent in the past two years, with sharp falls in the
United States, Canada, Latin America and Russia.
Benchmark Brent crude futures were up 12 cents at $45.92 a barrel by
1120 GMT (6:20 a.m. ET). U.S. crude futures were 4 cents higher at
$44.22. Both have gained around 70 percent in value from their lows
reached between January and February.
"It looks very strong at the moment, sentiment is bullish,
technicals look fine, so I rather see prices rising further from
here," Commerzbank analyst Carsten Fritsch said.
The drop in supply from some producers could be offset by increased
production in countries including Russia and Iran, however.
Russia's energy minister said the country might push oil production
to historic highs. Iran has reiterated its intention to reach output
of 4 million barrels per day, after a global deal to freeze output
collapsed and Saudi Arabia threatened to flood markets with more
crude.
Libya could also rapidly ramp up oil production as soon as stability
returns, the head of Libya National Oil Corporation (NOC) told an
oil summit in Paris.
Nigeria will hold talks with Saudi Arabia, Iran and other producers
by May, hoping to reach a deal on an output freeze at the next OPEC
meeting in June, where it's expected to be a key item on the agenda.
"The focus of the market is primarily on price-supportive news and
that's just an indication of how sentiment is," Saxo Bank senior
manager Ole Hansen said.
Hansen said fund flows into commodities had been strong this week,
driven by a weaker dollar.
Earlier this week, the dollar hit 10-month lows against some
commodity-related currencies. The Thomson Reuters Core Commodity
Index rose to its highest since early December. [MKTS/GLOB]
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"This whole recovery has been driven by supply being capped and
supply is price-sensitive and again we're back to levels where we
could see some of these producers breathe again," Hansen said.
French bank BNP Paribas said any hope of the market rebalancing from
the current surplus relied on a predicted decline in U.S. oil
production.
"The U.S. accounts for the bulk of non-OPEC's 2016 oil supply
contraction of 700,000 barrels per day forecast. If the decline in
the U.S. oil supply proves insufficient to tighten balances, then
... the oil price will remain low," it said.
In refined products, China's exports of diesel and gasoline soared,
spilling surplus fuel into a market that is already well supplied,
and threatening to cut Asian benchmark refining margins further.
(Additional reporting by Henning Gloystein in Singapore and Osamu
Tsukimori in Tokyo; Editing by Dale Hudson and David Evans)
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