The International Energy Agency on Friday expressed concerns about the impact on oil prices of the glut of crude supplies and tightening storage capacity in the United States. Both are  causing the price of oil futures to fall.

According to the IEA’s March report, U.S. oil production rose by 115,000 barrels a day last month, causing inventories to balloon, a MarketWatch article Friday reported. This, combined with the nation’s shrinking oil storage, could drag prices lower, the IEA report said. (Click on chart below for a larger image.)

crudeSUPPLY“On the face of it, the oil price appears to be stabilizing. What a precarious balance it is, however,” the IEA report said. “Behind the facade of stability, the rebalancing triggered by the price collapse has yet to run its course, and it might be overly optimistic to expect it to proceed smoothly.”

Crude-oil for delivery in April fell $1.23, or 2.6%, at $45.82 a barrel on the New York Mercantile Exchange, MarketWatch wrote. Prices were set to end the week with a loss of around 7.7%.

April Brent crude on London’s ICE Futures exchange shed 58 cents, or 1%, to trade at $56.50 a barrel — trading more than 5% lower for the week.

“The first half of 2015 looks distinctly oversupplied everywhere, and higher stocks are the overriding consequence, but thus far the United States has taken the lead,” IEA senior oil-market analyst Matthew Parry told MarketWatch.

Brent crude, meanwhile, has received some cushioning from supply concerns from Libya, Parry said.

The IEA report said that while steep drops in the U.S. oil rig count drove a price rebound, “U.S. supply so far shows precious little sign of slowing down. Quite to the contrary, it continues to defy expectations.”

“Plunging U.S. crude throughputs — due to seasonal and unplanned refinery outages, as well as weak margins and high gasoline stock builds in December — have seen U.S. crude inventories soar, compounding the impact of robust supply growth,” the agency said. “At last count, total U.S. crude stocks stood at 468 [million barrels], an all-time record.”

Chart: International Energy Agency

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