Baku, Azerbaijan, March 12
By Aygun Badalova -Trend:
Oil prices on the world markets should recover gradually in the coming years, Julian Jessop, Chief Global Economist at the British economic research and consulting company Capital Economics said in a report, obtained by Trend.
However, economist believes, that ample supply will keep prices well below $100 per barrel for the foreseeable future.
Oil prices have fell by more than 50 percent from last June and now stand at the level of below $60 per barrel.
During electronic trading on the New York Mercantile Exchange on March 12, the West Texas Intermediate (WTI) for April 15 delivery decreased by $1 to $46.05 a barrel. Brent crude for April 15 delivery decreased by $0.55 to $56.53 a barrel on the London-based ICE Futures Europe exchange.
After rebounding at the start of February the price of Brent had been relatively stable since this time last month, but prices have dipped again in the last few days, Capital Economics said in its report.
"On the other hand, the price of the US benchmark, WTI, has fallen steadily over the last month, despite not rebounding by nearly as much as Brent. This has caused the Brent - WTI spread to widen significantly since the middle of January, although it has narrowed recently," the report said.
The price of WTI has been held down by the dramatic increase in US stocks of crude oil since the start of the year. But growth in US shale oil production has started to slow as the dramatic fall in the number of rigs drilling for oil begins to be felt, according to the report.
Capital Economics forecasts WTI price at $50 per barrel in the first quarter, $55 per barrel in the second quarter, $58 per barrel in the third quarter and $60 per barrel in the fourth quarter of this year. In 2016, WTI price will average $65 per barrel, according to the forecasts.
Brent price is forecasted by Capital Economics at $60 per barrel for all four quarters of 2015. In 2016, Brent price will also average $65 per barrel, according to the forecasts of British company.
International Energy Agency's (IEA) latest Oil Market report said that global supplies fell by 235,000 barrels per day (bpd) in January to 94.1 million bpd on lower OPEC and non-OPEC production.
OPEC crude oil output fell by 240,000 in January to 30.31 million bpd, led by losses from Iraq and Libya. Output from Saudi Arabia, Kuwait, Angola and Nigeria edged up.
The US Energy Information Administration's (EIA) in its latest Short-Term Energy Outlook (STEO) said that the current values of futures and options contracts continue to suggest very high uncertainty in the oil price outlook.
"Although WTI futures contracts for June 2015 delivery traded during the five-day period ending March 5 averaged $54/bbl, the market's expectations (at the 95 percent confidence interval) for monthly average WTI prices in June 2015 range from $33 per barrel to $81per barrel. The band widens over time, with lower and upper limits of $32 per barrel and $108 per barrel for the broadly held December 2015 contract," EIA's report said.
EIA forecasts that Brent crude oil prices will average $59 per barrel in 2015, which is $2 per barrel higher than projected in EIA's previous STEO, and $75 per barrel in 2016.
WTI prices in 2015 and 2016 are expected by the EIA to average $7 per barrel and $5 per barrel, respectively, below Brent.
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Aygun Badalova is Trend Agency's staff journalist, follow her on Twitter:@AygunBadalova