Oil prices to dive again, report says

“The rebalancing that began when oil markets set off on an initial 60 percent price drop a year ago has yet to run its course”, the report said. Oil prices plunged by more than 50 per cent in the last few months.

“The prospects on a Greece bailout is encouraging but we’re down on anticipation that an Iran deal may also get done”, said David Thompson, executive vice president at Powerhouse, an energy-specialized commodities broker in Washington.

The Paris-based group predicted growth in worldwide demand for oil would slow for the rest of the year and in 2016, and that global supply growth would continue to outpace the world’s appetite for crude.

“The bottom of the market may still be ahead”.

Iran is close to a deal with world powers that would lift crippling sanctions on the Islamic Republic in exchange for curbs on its nuclear program.

“Physical oil market fundamentals remain weak and, in the absence of Opec production cuts or material supply disruption, this is unlikely to change meaningfully”, Deutsche Bank said in a note.

The global glut arose from a steep spike in USA oil supply on the back of the shale revolution and OPEC’s decision not to reduce output but rather to fight for market share with rival producers.

Crude oil demand wordwide totalled 93.5 million barrels per day and 93.1 million barrels per day on average in the first two quarters of the year respectively.

The IEA notes that a slowdown in demand this year comes as supplies from the Middle East, Russian Federation and the USA are at or near a peak.

The report noted that Iraqi oil output was more than 4 million barrels a day – an all-time high. “There is no doubt that any positive outcome of the deal will have an immediate downward effect on the prices even before any actual Iranian production rises”, the report said.

All seven major global oil firms have also reported a year-on-year decline as a result of lower oil prices.

Data from China as well as the IEA figures capped oil’s gains.

“We expect rig counts to stay at current levels for the considerable future”, said Chris Jarvis, analyst at Caprock Risk Management in Frederick, Maryland.

Reported by statement due to worldwide Energy Agency, the price of oil may plummet further due to the fact the whole world remnants “massively oversupplied”, before marketplaces pull in 2016 once yield production outside Organisation of the petroleum exporting countries grinds to a hold.