The energy monitor, International Energy Agency, says oil prices could fall further because producers are unlikely to cut output and demand is slowing. Fred Katayama reports.
Get set for a further fall in oil prices. The energy monitor International Energy Agency says the oil cartel OPEC is unlikely to agree to cut output, so the global oil glut will worsen. Its February report says, it is "hard to see how oil prices can rise significantly in the short term." Other factors that could pressure crude prices according to the IEA: Iraq is pumping at record levels, Iran has ramped up production, and the Saudis are boosting shipments. With slow growth in the emerging markets, the IEA sees global oil demand growth slowing this year despite the low oil prices. All this could further pressure Wall Street, since oil and stocks have recently been trading in tandem. U.S. crude trading below $30 a barrel early Tuesday. It has dropped more than 50 percent since last May. Chief economist Robert Brusca of FAO Economics said, "The market is in denial about the underlying fundamentals, trying to rally oil prices. It's very clear there's too much oil." And although the dollar has recently shed some of its value, the IEA predicts it'll appreciate because it's seen as a safe haven. That could pressure oil prices even more.