The oil market is "slowly but surely" reaching a balance as a result of the success of the OPEC production deal, the head of the oil industry and markets division at the International Energy Agency (IEA), told CNBC on Thursday.
"We're seeing demand growing fairly steadily in the oil market and we think that the balance is coming together slowly but surely and the numbers are there to support it," Neil Atkinson said shortly after the IEA published its monthly oil report.
"We think that as the year progresses that rebalancing will become more and more apparent in the drawdown of actual physical stocks," he added.
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, most notably in Russia and India. The IEA forecast global demand growth of 1.3 million b/d (barrels per day) after a weaker-than-expected thirst for oil from investors in the first three months of the year.
Oil producers were said to have scored "fairly well" since OPEC and non-OPEC countries implemented a landmark deal to curb global oversupply at the start of the year.
"It is now halftime for the six-month oil production cuts agreed by OPEC and eleven non-OPEC countries. So far, the game has gone fairly well for producers," the Paris-based organization said in the report published Thursday.
OPEC slashed output by around 1.2 million barrels per day (b/d) from January 1 for six months in order to remove a supply glut. Eleven other non-OPEC countries, including Russia, agreed to limit supply by half as much.
"For OPEC countries, compliance has been impressive from the start while non-OPEC participants are gradually increasing their compliance rate, although in their case it is harder for analysts to verify the data," the IEA added.
The IEA projected the oil market would likely tighten throughout the year as non-OPEC oil production, not just in the U.S., is forecast to increase once again.
"Even at this mid-way point, we can consider what comes next. It is of course OPEC's business to decide on its output levels, but a consequence of (hypothetically) extending their output cuts beyond the six-month mark would be bigger implied stock draws," Atkinson and his team said in the report.
"This would provide further support to prices, which in turn would offer further encouragement to the U.S. shale oil sector and other producers," the IEA added.
Oil prices fell by around 10 percent in March as a result of unplanned outages and rising political tension in the Middle East, though the IEA stressed prices had since stabilized.
Brent crude traded at around $55.83 a barrel on Thursday shortly after the European open, down 0.04 percent, while U.S. crude was around $53.05 a barrel, down 0.11 percent.