The report also said OPEC members pumped more oil in November, adding to a supply glut, and forecast global oil demand growth would slow next year.
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After yesterday’s recovery in the Brent price, it again came under renewed pressure during the time of trading, today morning it finds itself at a new 7-year low at $39.5 per barrel.
The International Energy Agency (IEA) expects oil prices to remain low through 2016, but forecasts a rebound to begin in 2017 as the current oil glut recedes and demand rises. On Friday, Russian’s deputy finance minister issued a stark warning of $40-$60 oil “for the next seven years”, Reuters reported.
The trigger was a meeting of oil producers’ cartel Opec late last week, which broke up in disarray as the member countries failed to agree to put a lid on production.
While Novak did not take part in that OPEC meeting in Vienna, Russia is expected to take part in the next expert-level meeting between OPEC and some non-OPEC producers on global oil markets on Tuesday.
Another day, another dramatic fall in oil prices.
Oil futures dropped as much as 1 per cent in NY and are down 8.6 per cent this week.
After a marathon session last week, Opec dumped its earlier production target of 30 million bpd and decided continue its policy of not constraining output. OPEC production remains steady and the market is now oversupplied by about 2m barrels a day.
Demand for OPEC crude in 2015 is estimated to stand at 29.4 mb/d, an increase of 0.4 mb/d over a year ago and representing a downward revision of 0.2 mb/d compared to the previous report.
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Russian Federation is preparing for the possibility that low crude prices are here to stay as competition between oil and other fuels such as natural gas intensifies. “As companies make further spending cuts in reaction to sub-$50/bbl oil, the impact on supplies – both from non-OPEC and OPEC – will be even more pronounced in the longer term”, the agency said. However, as extra Iranian oil hits the market, inventories are expected to swell by 300 million barrels. The group, which gave up individual production quotas several years ago in favor of an aggregate production ceiling, appeared to have largely done away with those restraints, as well. “Looking to 2016, I see very few reasons why we can see growth in prices”, Faith Birol, the executive director of the IEA, told a news conference Wednesday in Paris on the sidelines of the United Nations climate conference.
