“Without an increase in demand expectations, high-cost oil suppliers will continue to bear the brunt of the market-clearing process,” the IEA added.

The agency projected global oil demand growth for 1.2 million barrels per day in 2016 but cited a “sharp deceleration in demand growth in the three months to March, particularly in the US and China.”

Consequently, oil traders will have to monitor the Organization of Petroleum Exporting Countries to gauge the supply side. OPEC has hinted at its desire to limit production in face of the prolonged low oil environment. However, Iran, which has just recently re-entered the global oil market, is only just starting to ramp up production, potentially putting a damper on plans for a OPEC cut.

The IEA calculated that global production stood 1.8 million barrels per day more year-over-year “as a slight decline in non-OPEC was more than offset by OPEC gains.”

While oil prices have recovered  in recent weeks, this should not “be taken as a definitive sign that the worst is necessarily over,” the IEA warned.

Consequently, oil traders who have enjoyed the recent run up but are wary of further volatility ahead may take a look at a number of inverse ETFs to hedge their bets. For instance,  the ProShares UltraShort Bloomberg Crude Oil (NYSEArca: SCO)  tries to reflect the two times inverse or -200% daily performance of WTI crude oil. The DB Crude Oil Double Short ETN (NYSEArca: DTO) also follows a -200% performance of oil. Lastly, the VelocityShares 3x Inverse Crude (NYSEArca: DWTI) takes the three times inverse or -300% performance of crude oil.