Baku, Azerbaijan, May 3
By Aygun Badalova - Trend:
Brent average price will fall further this year amounting $41.1 per barrel in 2016 compared to $53.4 per barrel in 2015, according to the European Commission's Spring report on European economic forecast.
In 2017, European Commission forecasts Brent to average $45.9 per barrel.
After hitting a new cycle low of $28 per barrel in January 2016, Brent oil prices recovered to over $40 per barrel in March-April amid increased volatility, according to the report.
The recovery of Brent spot prices was supported by a slight tightening of supply based on lower OPEC and non-OPEC output, the report said.
Output losses in some OPEC members were only partly offset by rising Iranian production, the European Commission said.
While pumping near record volumes, Russia and Saudi Arabia kept the output stable during February-March as foreseen in their agreement with Qatar and Venezuela to freeze their oil production at January levels, the report said.
The European Commission mentioned that further attempts to reach a global deal on curbing oil production failed at a meeting in Qatar in April, but its negative impact on prices was outweighed by supply outages in Kuwait, Nigeria and Venezuela.
High levels of stocks and concerns over economic growth in emerging markets are likely to keep a cap on price pressures, the Commission believes.
Oil fell on Tuesday, as rising output from the Middle East and North Sea renewed concerns about a global supply overhang, Reuters reported.
Brent crude futures were trading 37 cents lower at $45.46 per barrel, retreating from earlier gains. WTI futures were also down 37 cents at $44.41 per barrel.