IEA Report : Oil prices will continue to decline
Paris ( Agencies + DIPLOMAT.SO) – According to a monthly report released by the International Energy Agency (IEA) on Nov 14, oil prices will continue to go downhill until the early starting months of 2015, unless oil companies reduce their production.
North America is supplying oil in excess amount and demand of crude oil had lowered, thus since June there had been 30 percent decline in oil prices, the lowest price recorded since 2010.
Although, IEA is expecting that the demand of crude oil would increase in 2015 with 93.6 million barrels per day which is 1.2 million barrels more than this year’s demand.
“Supply/demand balances suggest that the price rout has yet to run its course. Our supply and demand forecasts indicate that barring any new supply disruption, downward price pressures could build further in the first half of 2015,” IEA said in its report.
Organization of Petroleum Exporting Countries (OPEC) is trying to bring the market once more to its previous condition by balancing the supply and demand.
IEA reported that unless countries producing oil in large quantity like Libya are trapped in a matter over civil conflict, it is not likely that the supply will go down even when the prices are declining.
OPEC was expected to produce 30 million barrels a day but it is producing higher than the expected value with 30.6 million barrels a day. The group is over producing for the past six months, reported the IEA.
The oil prices will continue to decline if OPEC doesn’t reduce its production that could hurt the higher cost producers around the world.
Fatih Birol, the IEA’s chief economist said earlier this week that if oil prices stayed still at $80 per barrel, U.S. shale projects would see a fall in investment by 10% in 2015.
He further added “Should prices continue to fall, however, medium‐ and long‐term production may fall as companies forego development of costly projects.”For more news and stories, join us on Facebook,Twitter , or contact us through our Email: email@example.com, firstname.lastname@example.org