The market has been oversupplied since mid-2014, prompting members of the Organization of the Petroleum Exporting Countries and some non-OPEC producers to agree to cut output in the first six months of 2017.
OPEC agreed to slash the output by 1.2 million barrels per day from January 1, with top exporter Saudi Arabia cutting as much as 486,000 barrels per day. OPEC and other producers, including Russian Federation, agreed late in November to curb output by around 1.8 million barrels per day in the first half of 2017 to rein in oversupply.
The IEA projected the oil market would likely tighten throughout the year as non-OPEC oil production, not just in the USA, is forecast to increase once again.
Latest OPEC data showed members had cut March output beyond what they had promised. Opec meets on May 25 to decide whether to extend its supply deal for another six months. This would provide further support to prices, which in turn would offer further encouragement to the USA shale oil sector and other producers.
This means that non-OPEC oil production will soon be on the rise again.
"So far, the game has gone fairly well for producers", the IEA says, noting that Opec over-complied last month, as it had in the previous two months, while the others are starting to contribute.
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"Although the oil market will likely tighten throughout the year, overall non-OPEC production, not just in the USA, will soon be on the rise again", the IEA said.
Even at this mid-way point, we can consider what comes next.
"Oil products are definitely in the driver's seat, with solid demand and plenty of refinery outages buoying "cracks", says Michal Meidan, an Asia analyst at the consultancy Energy Aspects.
"Global stocks will draw further if Opec maintains solid adherence", the IEA said.
The IEA also warned global energy demand growth could weak this year as Russia, India, Korea, the United States and some Middle Eastern countries slow.
Oil inventories in the 35-nation Organisation for Economic Cooperation and Development increased by 38.5 million barrels in the first quarter to about 3 billion barrels, offsetting the decline in emerging economies, according to the IEA.
World benchmark North Sea Brent crude futures were up 10 cents at US$55.96 a barrel in afternoon trading Arabian Gulf time.