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Oil prices to recover partially from record low: IEA

The IEA forecasts oil prices to rebound partially.

Global oil prices are expected to recover only partially from their current $50-$60 a barrel range, the International Energy Agency (IEA) says in its five-year forecast.

The agency said on Tuesday that crude prices will continue to remain well below the level of more than $100, last seen in June 2014.

"The global oil market looks set to begin a new chapter of its history, with markedly changing demand dynamics, sweeping shifts in crude trade and product supply, and dramatically different roles for Organization of the Petroleum Exporting Countries, OPEC, and non-OPEC producers in regulating upstream supply," the report said.

It also forecast oil prices to stabilize at “levels higher than recent lows but substantially below the highs of the last three years."

Immediately after the release of the report, Maria van der Hoeven, IEA's Executive Director, said oil market has never experienced such a situation although “there have been drops and price corrections roughly every 10 years since the 1970s.”

The IEA also said oil price slump against a backdrop of weak demand “will not be as potent an economic stimulus.”

On Tuesday, oil prices slid on concerns about market supply glut. North Sea Brent crude fell 19 cents to $61.21 a barrel while light crude for March delivery dropped 88 cents to $51.9.

The international prices of oil have plunged by nearly 60% since June 2014 when it was traded at a fairly stable $100 per barrel. Experts blame a saturated market as well as the weak global demand for sliding oil prices.

KA/KA


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