(Source) Oil prices are likely to remain low over the next five years because of plentiful supply and falling demand in developed countries, the International Energy Agency said Tuesday in its annual forecast.
The Paris-based body, which advises developed countries on energy policy, says it expects oil prices to return to $80 per barrel in 2020, with further increases after that.
Oil prices are down more than 50 per cent since the middle of last year. On Tuesday, the U.S. crude oil contract closed up 26 cents at $44.13 US a barrel.
In its World Energy Outlook, IEA warned members not to become complacent about low cost oil from a handful of producers as that could be a threat to energy security.
And it urged countries to move more quickly towards reducing greenhouse gas emissions.
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(Source) Oil edged below $44 US a barrel on Monday, after another bearish outlook for crude from Goldman Sachs.
Goldman said in a research report that oil prices could go “sharply lower” as storage tanks hit capacity, predicting the oil market would not balance itself in 2016.
West Texas Intermediate oil closed down 78 cents at $43.81 US a barrel on Monday afternoon, while Brent, the main international contract, was down 59 cents at $47.42 US a barrel.
Western Canada Select, a Canadian oilsands contract, had fallen below $30 again to $29.23 US a barrel.
The oversupply of oil worldwide has had storage tanks in Cushing, Oklahoma, at record levels for most of the year. It’s not just crude that is in oversupply, but also refined products.
Goldman Sachs sees further risk to crude prices which are already down 60 per cent from a year ago.
“Distillate storage utilization in the U.S. and Europe is nearing historically high levels, following near record refinery utilization, only modest demand growth (especially relative to gasoline), and increased imports from the East on refinery expansion and Chinese exports,” it said in its report.
Continue to read complete article: Europe also has a storage problem