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 The International Energy Agency, which typically refrains from
predicting oil prices, said in its monthly report that prices could
fall further in 2015 after declining to their lowest levels since
2010 below $80 per barrel <LCOc1>.
"While there has been some speculation that the high cost of
unconventional oil production might set a new equilibrium for Brent
prices in the $80 to $90 range, supply/demand balances suggest that
the price rout has yet to run its course," the IEA said.
Barring any new supply disruption, "downward price pressures could
build further in the first half of 2015", it said.
Oil prices have fallen 30 percent since peaking in June, pressured
by a strong U.S. dollar and rising U.S. light oil output while
largely ignoring the impact of Libyan supply disruptions.
Benchmark Brent crude oil was up 50 cents at $77.99 a barrel by 0910
GMT on Friday, having dropped from above $115 in June.
"Pressure on OPEC to reduce production is building, but at the time
of writing there appeared to be no clear consensus on a formal
supply cut ahead of its meeting in Vienna later this month," said
the IEA, which represent industrialised nations.
For 2015, the IEA left its forecast of global oil demand growth
unchanged at 1.13 million from a five-year annual low of 680,000 bpd
in 2014, saying the macroeconomic backdrop was expected to improve.
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While China, the top source of incremental oil demand in recent
years, has entered a less oil-intensive stage of development, years
of high prices have helped new technology release oil resources in
North America and elsewhere.
"It is increasingly clear that we have begun a new chapter in the
history of the oil markets," the IEA said.
Total global oil deliveries edged up in October and were 2.7 million
bpd higher than the year before as higher OPEC production added to
non-OPEC supply growth of 1.8 million bpd.
OPEC output eased by 150,000 bpd in October to 30.60 million bpd,
remaining well above the group’s official 30 million bpd supply
target for a sixth month running. The IEA said it expected demand
for OPEC oil next year at around 29.2 million bpd, 100,000 bpd lower
than its previous forecast.
However, the IEA said supply risks remained "extraordinarily
elevated" and could be exacerbated by falling prices.
"The two countries responsible for a recent recovery in OPEC supply
growth, Iraq and Libya, are both in the throes of vicious
conflicts," it said.
Price drops cast new doubt on Iraq’s ability to fund capacity growth
while Venezuela and Russia were also suffering from plummeting
prices, it said.
(Editing by Christopher Johnson)
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