Report: Oil market likely to stabilize, but investment likely to shrink

The International Energy Agency, an independent organization that focuses on energy issues for its 29 member countries, released a report today looking at the future of the oil market. The Medium-Term Oil Market Report notes that while oil prices should start to rise gradually once the market begins rebalancing, the availability of resources that can be easily and quickly tapped will limit the scope of rallies – at least in the near term. However, the report points to the risk of an oil price spike in the later part of the outlook period arising from insufficient investment. Global oil exploration and production capital expenditures (capex) are expected to fall 17% in 2016, following a 24% cut in 2015 – which would be the first time since 1986 that upstream investment has fallen for two consecutive years, the report continues. The report estimates 4.1 million barrels a day (mb/d) being added to global oil supply between 2015 and 2021, down sharply from the total growth of 11 mb/d in the period 2009-2015. #dally #news