The oil market has essentially reached a balance and will continue to accelerate in the near term, the International Energy Agency (IEA) said in its monthly report published Tuesday, just nine days before OPEC's much anticipated ministerial meeting.
"We think the rebalancing is here and the rebalancing will continue," Neil Atkinson, head of the oil industry and markets division at the IEA, told CNBC on Tuesday.
"In the first quarter of 2017, we might not have seen a resounding return to deficits but this report confirms our recent message that re-balancing is essentially here and, in the short term at least, is accelerating," the IEA report added.
Global oil markets are on course to reach a supply-demand balance in 2017, the IEA said, with supply deficits expected to pick up speed in the near term.
According to the IEA's monthly report, global demand growth is poised to fall for a second consecutive year as a result of subdued gains. However, the report warned even if supply cuts are extended at OPEC's May 25 meeting, "much work remains to be done in the second half of 2017" in order to drain stocks closer to its benchmark five-year average.
"If, as a scenario and not a forecast, the current (OPEC) output cuts were to be extended for the rest of 2017, oil stocks would start to fall quite sharply… but because they are falling from such a great height, they won't get down to the five-year average until much later in the year and possibly not then," Atkinson said.