Reuters reports that the International Energy Agency (IEA) said that oil prices are unlikely to mount a dramatic and sustained surge despite vaccines expected to boost demand later this year.

"Oil's sharp rally to near $70 a barrel has spurred talk of a new supercycle and a looming supply shortfall. Our data and analysis suggest otherwise," the IEA said in its monthly report.

"For a start, oil inventories still look ample compared with historical levels despite a steady decline ... On top of the stock cushion, a hefty amount of spare production capacity has built up as a result of OPEC+ supply curbs," it said.

"The prospect of stronger demand and continued OPEC+ production restraint point to a sharp decline in inventories during the second half of the year," the IEA said.

"For now, however, there is more than enough oil in tanks and under the ground to keep global oil markets adequately supplied."