Baku, Azerbaijan, May 3
By Aygun Badalova - Trend:
The surge in the US shale production may delay the rebalancing of the world oil market, analysts of UK economic research and consulting company Capital Economics said in a report obtained by Trend.
Oil prices have jumped on hopes that the market will finally rebalance later in the year, although this partly depends on cuts in non-OPEC supply that may not materialise if prices continue to surge, the report said.
A premature rebound in prices could see US shale production ramp up again, delaying the rebalancing, while the overhang of stocks will remain high in any event, the report said.
"We would therefore not be surprised to see some temporary pull-backs in oil prices over the remainder of the year, before the recovery resumes in earnest in 2017," analysts said.
Analysts continue to expect further gains, to as high as $60 a barrel in 2017 for both Brent and WTI.
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.
According to the International Energy Agency's (IEA) expectations, the oil market to come back into balance from oversupply by next year.