Oil prices will not be able to reach their past peaks.

(Baonghean) - According to a recent statement, the International Energy Agency (IEA) forecasts that world oil prices could rise to $73 in 2020, while warning that oil prices will not be able to reach past peaks.

Although the oil market is beginning to show signs of recovery, the IEA remains very cautious in its assessments. This is one of the rare instances of global oil prices recovering since the sharp 60% drop in crude oil prices that began in June 2014.

According to the IEA, the oil market will enter “a new chapter” characterized by “more price-sensitive conditions than in the past and less supply.” The IEA states this is the result of a “rapid but relatively limited market rebalancing, with oil prices stabilizing and rising above recent lows (below $50/barrel), but still below their three-year peak.”

According to some analysts, the current oil market is focused on reducing production in the medium term. This is believed to be due to investment cuts, including profit reductions from projects by major oil companies worldwide, in response to the recent sharp drop in oil prices.

Over the next six years, the IEA projects that demand will grow faster than supply. This partly explains the recovery in oil prices, but consumption will remain weaker than previously expected, and of course, this must be considered in the context of a slow economic recovery. According to IEA calculations, an average of 1.1 million barrels per day must be extracted to reach 99.1 million barrels in 2020, compared to 92.4 million barrels in 2014.

During this period, only about 860,000 barrels of oil will be produced per day, down from 1.8 million barrels in 2014. Two-thirds of this oil does not come from member countries of the Organization of Petroleum Exporting Countries (OPEC): these countries will produce around 60 million barrels per day in 2020, exceeding 56.6 million barrels in 2014. This is expected to provide a boost in 2017 before the encroachment of shale oil production. Shale oil production is projected to increase to 5.2 million barrels per day in 2020 compared to 3.6 million barrels per day in 2014.

Chu Thanh(According to LeMonde, February 10)