Off the wire
• Urgent: U.S. dollar climbs on Greek debt deal hopes  • Nigeria's oil rich state signs water project MoU with EU  • Portuguese Coimbra University develops technology to detect mines  • Roundup: Turkey president visits Latin America to boost business ties  • UN pledges to support Nigeria to defeat Boko Haram insurgency  • Tanzania steps up efforts to end child marriage  • 4 suspected Pink Panther fences arrested in Vienna hotel  • 1st LD Writethru: Malawian president names new police chief  • 1st LD Writethru: Gold down on strong U.S. equities, dollar  • BiH begins process to form state-level government  
You are here: 　 Home

Roundup: Ample supplies, weak demands suppress oil prices: IEA

Xinhua, February 11, 2015 Adjust font size:

International oil prices may be under downward pressure when there are sufficient supplies and weak demands, the International Energy Agency (IEA) said here in its annual medium-term oil market report Tuesday.

ADEQUATE SUPPLIES, WEAK DEMANDS

The agency predicted the global oil capacity would expand by 5.2 million barrel per day by 2020, and it also indicated the toll on production would vary by country.

The United States will remain the world's top source of oil supply growth up to 2020, as growth in U.S. light tight oil (LTO) is expected to regain momentum in the latter part of the forecast period.

However, Russia faces a storm of lower prices, sanctions and currency swings, pushing its production into contraction, said IEA.

Organization of Petroleum Exporting Countries' (OPEC) share of global supply will not recover to the levels enjoyed before the surge in LTO supply, as geopolitical instability persists in Iraq.

In terms of demands, the agency said the projections of oil-demand growth have been revised downwards as weak outlook of global economy.

"Weak demand, due to the lingering effects of the Great Recession, is part of the reason why prices fell in the first place," said IEA Executive Director Maria Van der Hoeven in London.

"That makes it less likely that lower prices will in and of themselves fuel a large increase in demand," said Van der Hoeven.

LESS OIL INTENSIVE

Van der Hoeven said the global economy has become less oil intensive and oil was facing more competition from other fuels.

"It is a different world than it was last time we saw an oil price plunge," said Van der Hoeven.

Emerging economies, notably China, have entered less oil-intensive stages of development and indeed the global economy in general has become less oil intensive, said the agency.

Besides, concerns about climate change are influencing energy policies, renewables are increasing pervasive, and a globalized natural gas market is rewriting the rules of inter-fuel competition.

The falling oil prices looked less attractive as the deflationary environment of some of the largest Organization for Economic Co-operation and Development (OECD) economies.

Meanwhile, outside of the OECD, weakening currencies mean that lower prices in U.S. dollars will not necessarily seem that much lower to end users in domestic currencies. Endit