IEA President Says Oil Prices Facing Downward Pressure Despite OPEC

Oil prices are set to fall later this year despite the recent OPEC agreement to limit production, Fatih Birol, the executive director at the International Energy Agency, has told CNBC.

The oil cartel’s production cut last year gave a boost to prices as it limited supply, but Birol expects other countries — most notably the U.S. — will simply step in to fill the void and depress prices, he predicted.

“As a result of the increase in prices. We are going to see a substantial amount of oil pouring into the market from the United States,” he said at the World Economic Forum in Davos on Tuesday, giving a “couple of months” timeline for his estimate on prices.

“At the end of the day, we are definitely going to see more oil coming from the United States,” he said. “We will see a bit of a zigzag and we will see a greater volatility of the prices.”

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza