Crude prices to remain depressed until 2017 even with oil sands coming to ‘standstill’ — IEA

The ongoing oversupply of oil will keep prices down until 2017, much later than previously forecast, despite some major producers such as Canada are likely to freeze projects under construction, experts at the International Energy Agency (IEA) said Monday.

In its annual Medium-Term Oil Market Report, the IEA warns that Canada’s oil sands industry is likely to have zero to negative growth this year as companies will keep freezing projects under construction on increasing environmental concerns, lack of pipeline access and policy changes.

“We are likely to see continued capacity increases (in) the near term, with growth slowing considerably, if not coming to a complete stand still, after the projects under construction are completed,” the agency said

The situation, however, won’t help prices, says the EIA, a Paris-based organization of 29 major oil importing nations.

Last year, the agency had forecast a "relatively swift" recovery. Instead, oil prices have continued to fall, reaching a level below $30 a barrel last seen in 2003.

More to come…

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