After a recovery that extended into the new year, oil prices have hit a rough patch as inventories have been building,
Daily domestic oil production averaged 8.9 million barrels last year,
and the Energy Department is forecasting an average of 9.2 million barrels this year and 9.7 million barrels in 2018.
“Demand continues to steadily rise and industrial players are moderately gearing up production.”
Traders who move the commodity markets from day to day had become overly complacent
that oil prices would continue to climb from the lows of under $30 a barrel of a year ago, energy analysts said, as it appeared that the OPEC agreement would hold.
Most energy analysts, however, said that while the renewed selling by commodity traders might send oil prices below $45 a barrel
for a time, the most likely outlook was for prices to bounce back and to continue to climb over the next few years.
“We see the green shoots of the recovery,” he said, “driven by a better outlook and fundamentals.”
Many analysts expect a rise in oil prices in the coming years, partly because investments in exploration have been cut sharply amid the downturn of the past two
and half years and partly because political risks remain high in many producing countries like Iraq and Venezuela.