The agency also said in its Medium Term Oil Market report that oil prices (LCOc1), which slid from $115 a barrel in June to a near six-year low close to $45 in January, would likely stabilize at levels substantially below the highs of the last three years
"The market rebalancing will likely occur relatively swiftly but will be comparatively limited in scope," the IEA said.
"The price correction will cause the North American supply 'party' to mark a pause; it will not bring it to an end."
Supply growth of U.S. light, tight oil will initially slow to a trickle but regain momentum later, bringing production to 5.2 million barrels per day (bpd) by 2020, the IEA said. The outlook for Russian output is less optimistic.
Now, the IEA expects global growth in oil demand to accelerate to 1.13 million bpd in 2016 from 910,000 bpd in 2015. Still, it saw the price decline as having a marginal impact on demand growth for the rest of the decade.