06 December 2014, Stockholm – The chief economist of the International Energy Agency (IEA) said on Friday he sees oil rising to near $100 a barrel in coming years, some 40 percent above current prices that have been hit by a supply glut and sluggish global growth.
“I think an oil price, which will balance the markets in the next years to come, will be close to $100,” Fatih Birol told a conference in Stockholm, when asked to quantify at what level he sees oil prices long-term.
“We shouldn’t be blinded with what’s happening now. Looking at the geology, looking at the economics of the oil markets, one shouldn’t be surprised if we see in a few years’ time, again, a rebound of prices,” Birol said.
The IEA is the West’s energy watchdog. Brent crude on Monday hit a five-year low below $68 a barrel after averaging around $110 in 2011 to 2013.
On Friday, Brent extended losses below $70 and was set for a second weekly fall, with top oil exporter Saudi Arabia cutting prices in another indication it would maintain output in an oversupplied market.
Oil markets have been volatile since last week’s decision by the Organization of the Petroleum Exporting Countries not to cut production.
In recent days, traders have sought a price floor for crude, which has tumbled some 40 percent from June highs.
*Anna Ringstrom; Dale Hudson – Reuters