A positive demand outlook Friday from the International Energy Agency helped lift oil prices, which struggled to maintain a rally in the previous session.
The IEA said the price for crude oil might not have reached its floor yet, indicating the slump may continue for the short- to medium-term. The low price of crude oil is constricting production from North America, while unrest in the Middle East is impacting output from Libya and Iraq, two members of the Organization of Petroleum Exporting Countries.
Though recovery won't be imminent, the IEA said it did expect the markets to rebound at some point in 2015.
Thursday price movements were volatile after a decline in the value of the U.S. dollar, the currency used for commodities, and the expiration of the February contract. Brent for March delivery was up nearly 3.5 percent early Friday to test $50 per barrel.
While Brent crude oil futures are close to a six-year low, and off nearly 20 percent from the price at the last IEA report, the Paris-based agency said its expectations for demand growth was unchanged from the December outlook.
The low price of oil, however, has sparked fears of a global economic slowdown sparked by deflationary trends emerging in the Russian, European and British economies. In the United States, some industries that depend on oil production are downsizing. Word from the U.S. Labor Department that its Consumer Price Index posted its largest drop since December 2008 added to further broad-based economic concerns.
Though IEA said the low price environment was limiting oil supply growth expectations for non-OPEC producers, the price for West Texas Intermediate, the U.S. benchmark, rallied 2 percent to just over $47 per barrel, still on the February contract.
