Oil advanced from the highest close in more than 10 months before U.S. government data forecast to show crude stockpiles dropped for a third week, trimming a glut.

Oil traded near a four-month high in London, swinging between gains and losses as Iraq said it raised output to a record in March while U.S. production fell.

Oil prices may have passed their lowest point as shrinking supplies outside OPEC and disruptions inside the group erode the global surplus, the International Energy Agency said.

The global oil glut will persist into 2017, limiting any chance of a price rebound in the short term as the surplus takes even longer to clear than previously estimated, according to the International Energy Agency.

The global oil surplus will be bigger than previously estimated in the first half, increasing the risk of further price losses, as OPEC members Iran and Iraq bolster production while demand growth slows, according to the International Energy Agency.

Global oil markets could “drown in oversupply,” sending prices even lower as demand growth slows and Iran revives exports with the end of sanctions, according to the International Energy Agency.

Oil rose from the lowest close in more than 12 years in New York as volatility climbed amid speculation that prices have fallen too fast.

Oil fell below $35 a barrel in New York for the first time since 2009 as Iran reiterated its pledge to boost crude exports, bolstering speculation OPEC members will exacerbate the global oversupply.

Brent crude fell below $40 a barrel for the first time in almost seven years after OPEC effectively abandoned limits on crude output, prompting speculation that a record global glut will continue.

The average price of crude sold by OPEC fell below $40 a barrel for the first time since 2009, underscoring the financial cost of the group’s strategy to defend its market share.