Crude oil prices move lower on word from the International Energy Agency that prices won't move back above $100 per barrel before the end of this decade. File photo by Monika Graff/UPI |
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NEW YORK, Nov. 10 (UPI) -- Expectations that crude oil prices won't return to the $100 per barrel mark anytime soon put downward pressure on the energy market in early Tuesday trading.
In the much-watched World Energy Outlook for 2015, the International Energy Agency said the forces are in place to rebalance a market characterized by wide disparities in supply in demand. In its mid-range forecast, however, IEA said crude oil prices won't reach $80 per barrel for another five years.
Brent, the global benchmark price for crude oil, last traded above $80 per barrel on Nov. 12, 2014. Largely on the back of growth in U.S. oil production and steady output from members of the Organization of Petroleum Exporting Countries, crude oil prices have been on downturn for more than a year.
Brent lost about 0.4 percent from the previous session to trade at $47 per barrel early Tuesday. West Texas Intermediate, the U.S. benchmark price for crude oil, was down about 0.6 percent to $43.59 per barrel.
The latest statements from OPEC suggest production from the 12-member group will hold steady on expectations demand growth will come from Asia. In its latest snapshot, meanwhile, the U.S. Energy Information Administration said declines are expected from most of the shale oil basin in the United States.
The IEA finds that, by 2040, net imports from China will be nearly five times that of the United States. Despite the growth in shale oil, the United States is still a net importer of oil.
Shifting dynamics, the IEA finds, means the global reliance in Middle East oil will eventually return to levels not seen since the 1970s. In the early 1970s, an export embargo to the United States enacted by Arab members of OPEC created shock-waves across the energy market.
"Now is not the time to relax," IEA Executive Director Fatih Birol said in a statement. "Quite the opposite: A period of low oil prices is the moment to reinforce our capacity to deal with future energy security threats."
While long-term forecasts are generally inaccurate, reports find crude oil prices will remain depressed for the foreseeable future. The Bank of England forecast a price per barrel at around $62 in 2018. Fitch Ratings said to expect a "modest" price recovery by 2017, when Brent should average about $65 per barrel.
