Brent crude prices will average US$55 a barrel this year before recovering slightly to around US$60 in 2016, according to the International Energy Agency (IEA).
In its “Medium-Term Oil Market Report” published Tuesday, the IEA said prices are only expected to recover gradually to about US$73 by 2020.
Despite the recent advance for crude futures, “the market does not seem to be expecting prices to revisit earlier highs anytime soon. Not only have prompt prices collapsed, even price expectations for the back end of the curve have been significantly downgraded,” the IEA said in the report.
The price assumptions mark a steep downgrade from last year’s IEA report, when prices of US$100 a barrel in 2015 and 2016 were expected, Marketwatch.com noted.
“The rules of the oil market have changed,” the IEA was quoted as saying in its latest report.
“The clear distribution of roles between OPEC and non-OPEC countries that governed the oil market for the last 30 years has been suspended, at least for now. Non-OPEC producers cannot, for now, count on OPEC to act as swing supplier and cut output in the event of a price drop.”
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