The oil market has entered a new era with lower Chinese economic growth and booming US shale output, making a return soon to high prices unlikely.
The International Energy Agency, which typically refrains from predicting oil prices, said in its monthly report that prices could fall further in 2015 after declining to their lowest levels since 2010 below $80 per barrel.
Barring any new supply disruption, “downward price pressures could build further in the first half of 2015”, it said.
Oil prices have fallen 30 percent since peaking in June, pressured by a strong U.S. dollar and rising U.S. light oil output while largely ignoring the impact of Libyan supply disruptions.
Benchmark Brent crude oil was up 50 cents at $77.99 a barrel having dropped from above $115 in June.
For 2015, the IEA left its forecast of global oil demand growth unchanged at 1.13 million from a five-year annual low of 680,000 bpd in 2014, saying the macroeconomic backdrop was expected to improve.
While China, the top source of incremental oil demand in recent years, has entered a less oil-intensive stage of development, years of high prices have helped new technology release oil resources in North America and elsewhere.
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Total global oil deliveries edged up in October and were 2.7 million bpd higher than the year before as higher OPEC production added to non-OPEC supply growth of 1.8 million bpd.
OPEC output eased by 150,000 bpd in October to 30.60 million bpd, remaining well above the group’s official 30 million bpd supply target for a sixth month running. The IEA said it expected demand for OPEC oil next year at around 29.2 million bpd, 100,000 bpd lower than its previous forecast.
