Steam and other emissions are seen coming from funnels at an oil refinery in Melbourne in this July 7, 2009 file photo. REUTERS/Mick Tsikas/Files

LONDON (Reuters) - Oil supply and demand fundamentals have returned to take the reins from external financial factors in driving the market, the International Energy Agency said on Friday.

“The oil price correlation with macroeconomic factors and financial market activity that has marked most of 2009 may be weakening as supply and demand fundamentals reasserted more control over price direction,” the Paris-based agency said in its monthly oil market report.

For most of 2009, oil prices have reacted to macroeconomic figures, such as jobs data, and other markets such as currency and equity as demand remained weak throughout the year.

The IEA, adviser to 28 industrialised nations, said it expected oil demand growth, to be led by China, to put a floor on oil prices, pushing up long-dated U.S. crude futures above $100 a barrel, while the prompt oil prices have been around $70-$75 in December.

It also said the large volume of oil products stored at sea despite a sizable idled refining capacity is capping a significant rise in prompt oil prices.

(Reporting by Ikuko Kurahone)