Global oil demand is expected to fall by a record 9.3 million barrels a day (mb/d) year-on-year in 2020.
Brent crude was at $56.99 a barrel, down 33 cents by 0121 GMT after rising 5.2% last week, the biggest weekly gain since September 2019.
Chinese refiners were set to slash runs by 1.1 million bpd in the first quarter, with throughput in 2020 contracting by 500,000 bpd year on year.
"For now the risk of a major threat to oil supplies appears to have receded," the Paris-based IEA said in a monthly report.
"The situation is becoming even more uncertain ... global oil demand growth has been very sluggish in the first half of 2019," the IEA said in its monthly report.