Oil prices have increased after the International Energy Agency (IEA) announced that non-OPEC production will come down in 2016 and rebalance the oversupplied market.

Brent crude futures edged up 21 cents at $46.00 a barrel, while the US crude futures were 17 cents higher at $44.35, Reuters reported.

According to IEA chief Fatih Birol, in the past two years low oil prices had reduced investment by about 40%, with declines witnessed in the US, Canada, Latin America and Russia.

"IEA said that growth in global oil demand will ease to around 1.2 million barrels per day in 2016."

The reduction in supply from some producers could be offset by increased production in Russia and Iran.

Russian Energy Minister Alexander Novak said that the country may increase oil production, while Iran reiterated its intention to reach output of four million barrels per day to regain market share after lifting of international sanctions.

Nigerian oil minister told the news agency that the country may hold discussions with Saudi Arabia, Iran and other producers by May 2016 to reach an agreement on output freeze proposal at the next OPEC meeting to be held in June 2016.

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In its Oil Market Report for April 2016, IEA said that growth in global oil demand will ease to around 1.2 million barrels per day (Mb/d) in 2016, below the 1.8Mb/d expansion in 2015.

The report noted that OPEC crude oil production fell by 90,000b/d in March 2016 to 32.47Mb/d as ongoing outages in Nigeria, the United Arab Emirates and Iraq more than offset a rise from Iran and higher flows from Angola.