Oil set to rally
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The oil price is trading higher today, and further gains are expected after a report out today from the IEA that showed demand was outstripping supply.

According to the energy watchdog, the OPEC deal is starting to bear fruit and the reduction of oil in the market is starting to balance out, and having a positive effect on prices,

"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," noted head of the IAE Neil Atkinson in an interview after the report was released.

"We think that as the year progresses that rebalancing will become more and more apparent in the drawdown of actual physical stocks," he added.

With only 12 weeks passed since the OPEC deal to cut production gone, the energy agency believes there oil price should continue to rise and the willingness from non OPEC members to also cut production will also help things along,

"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 their report

"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.

There is also speculation that OPEC will extend the production cuts when members meet on may 25th which is also likely to further support the oil price.

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