The oil price steadied in yesterday’s trading after the immediate reaction to Iranian production coming back onto the market sent it below $28 a barrel.
International benchmark Brent crude fell to fresh lows not seen since September 2003, hitting $27.67 before climbing back about $28.
Oil cartel group Opec warned in its latest monthly review of the oil market that high cost producers in the US, Canada and Russia would begin to scale back their output.
The group estimates that non-Opec supply would shrink by 660,000 barrels a day in 2016. It was previously forecast production would drop by 270,000.
Non-Opec producers have proven to be more resilient than expected against the oil price rout, increasing output in 2015 by 1.23m barrels a day, according to the report.
Opec leader Saudi Arabia’s biggest rival Iran charged back into the market following the lifting of trade sanctions against the country, ordering an increase in production and unleashing waiting tankers loaded with some 50m barrels of oil.