An International Energy Agency (IEA) official predicted the worldwide glut in oil supplies would drop in the next year or two and result in a rebound of oil prices.
Global oil supplies will be rebalanced by the largest cut in oil production by non-OPEC countries in a generation, IEA Executive Director Fatih Birol told reporters in Tokyo. "This year, we are expecting the biggest decline of non-OPEC oil supply in the last 25 years.
"At the end of this year or the latest 2017, we expect oil markets to rebalance and prices to rebound," Birol added.
A reduction in about 700,000 barrels of oil a day, coupled with growing demand from emerging economies, will lead to increases in the price of oil, he said.
"Global oil demand grows [at] a healthy pace, led by India, China and other emerging countries," Birol said.
But the drop in oil supplies could be offset by increased output from countries such as Iran, Libya and Russia. So any rebalancing of global oil supplies will hinge largely on cuts by U.S. oil producers, he added.
"Any hope of market rebalancing from the current surplus in supply [lies] on the predicted decline in U.S. oil production," said analysts at the French bank BNP Paribas. "If the decline in the U.S. oil supply proves insufficient to tighten balances, then ... the oil price will remain low."
The predictions came as Birol and other top government officials met in Tokyo to prepare for a Group of Seven (G-7) summit next month in Japan.
After the meeting, Paul Stevens, a distinguished fellow at Chatham House, the Royal Institute of International Affairs, called for G-7 leaders to encourage oil companies to boost investment in oil production as part of a broader effort to ensure stable oil supplies.