Oil market, prices to be stable by 2017: IEA chief

The Dollar Business Bureau

Chief of International Energy Agency (IEA) predicted that the oil market and prices to be stable by 2017.

Fatih Birol, Executive Director, IEA said today he thinks that the oil market would recover and balance by 2017 due to oversupply, considering there is no major economic crisis.

IEA chief said that low prices of oil have cut investment in oil by around 40 percent in the last two years, with sharp declines being witnessed in the US, Canada, Russia and Latin America. He expects that the world's reliance on oil supplies from Middle East will enhance significantly in the coming few years.

Addressing reporters in Tokyo, he said, "We are expecting the largest fall this year in oil supply from non-OPEC (Organisation of the Petroleum Exporting Countries) in the last 25 years, around 700,000 barrels per day. Simultaneously, demand growth globally is in a hectic pace, which is led by India, China and other developing countries.

Despite a slight recovery in prices of Brent oil above $45 a barrel, Birol said, the conditions were still hard for producers of shale oil.

"I think that the price at $45 brings a little relief for all the oil producers around the world. However, this is still quite lower than to make profitable the entire production of shale oil for the US," he said.

“Crude oil exports from Iran could increase this year by half a million barrels per day after the sanctions were lifted against the country,” he added.