Oil price rally another 'false dawn', says global energy watchdog
another "false dawn" in a market set to become more
oversupplied, according to the international energy
watchdog.
A recovery from a near 13-year low of $27 per barrel
for the international price benchmark Brent crude had
already peaked at close to $36 last week and on Monday,
the price started to move markedly lower again. Yesterday,
the downward move gathered pace and Brent shed eight
per cent over the London and New York trading sessions
to a little above $30.
According to the International Energy Agency, this was
inevitable, as supplies are growing at a time when the world
is "already awash with oil".
In its latest set of forecasts, the
watchdog predicts the return of Iran to the global export
market and increases in output from Russia, Saudi Arabia
and elsewhere would keep excess supply at two millions
barrels a day until March. Even after that, production will
exceed demand by 1.6 million barrels a day in the second
quarter and by at least several hundred thousand barrels a
day through the second half of the year.
Adding to this, demand growth will be lower than expected
at 1.2 million barrels a day, amid the slowdown in China and
a move to renewable energies.
"If these numbers prove to be accurate, and with the
market already awash in oil, it is very hard to see how oil
prices can rise significantly in the short term," it added.
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