The International Energy Agency (IEA) released its monthly Oil Market Report on Tuesday. The agency said that global oil supply fell by 200,000 barrels a day to averaged 96.5 million barrels a day in January compared with January 2014.

According to the IEA, OPEC production increased by 1.7 million barrels a day to 32.63 million barrels a day in January, compared with the previous month. The increase was driven by higher output from Iran.

"Persistent speculation about a deal between OPEC and leading non-OPEC producers to cut output appears to be just that: speculation. It is OPEC's business whether or not it makes output cuts either alone or in concert with other producers but the likelihood of coordinated cuts is very low," the agency said.

Non-OPEC supply declined by 500,000 barrels a day in January. The IEA expects non-OPEC output to drop by 600,000 barrels a day to 57.1 million barrels in 2016.

The agency lowered its OPEC output for 2016 by 100,000 bpd to 31.7 million barrels a day.