The global supply and demand for oil are underway to continue to rebalance this year, after the turmoil brought about by the pandemic in 2020, the International Energy Agency (IEA) said on Thursday.

Despite increasing its estimates for world oil production in 2021, the IEA said in its monthly report that a recovery in demand will outpace growing production in the second half of the year to cause "a rapid reduction in stock", reducing excess oil that has accumulated in the world since the beginning of the covid-19 pandemic.

The agency significantly increased its forecast for producing nations outside the production pact between the Organization of Petroleum Exporting Countries (OPEC) and allies such as Russia, with world oil supply rising 830,000 barrels a day this year.

At the same time, the IEA reduced its forecast for global oil demand by 200,000 barrels per day to 96.4 million barrels, or about 3% less than in 2019, before the pandemic - although it added that part this came thanks to a change in historical data.

Still, with much of the developed world grappling with the new variants of the covid-19 and renewed measures of social distance, an optimistic economic outlook and the discipline of OPEC and its allies are accelerating the reduction of global oil stocks, said the IEA . The entity added that "the prospect of tighter markets ahead" has been responsible for a sharp rise in oil prices in recent weeks.