Graphic Courtesy BloombergAnother setback could be in the making for Louisiana’s oil and gas industry, which has been cutting jobs in recent months due to falling oil prices.
BloombergBusiness reports today that the worst may not be over for the struggling industry.
Citing a report from the International Energy Agency, the news source says prices may fall further as the world remains “massively oversupplied.”
"The bottom of the market may still be ahead,” the agency, which advises 29 industrialized nations on energy policy, noted in its closely watched monthly oil-market report. “Non-OPEC supply growth is expected to grind to a halt in 2016 as lower oil prices and spending cuts take a toll.”
The slowdown in global oil demand growth this year comes amid near-highs in production from the Middle East, Russia and the U.S., an imbalance that led crude prices to tumble more than 60 percent during the second half of 2014. The rebalancing that began when oil markets set off on the drastic price drop in the middle of 2014 has yet to run its course, according to the IEA.
That means the subsequent recovery in pricing is now in jeopardy, according to the story:
There will be no overall production growth outside the Organization of Petroleum Exporting Countries next year for the first time since 2008, according to the IEA. Growth in U.S. shale oil supplies will stagnate to the middle of 2016 while output declines in Russia, the Paris-based adviser said in its first detailed assessment of the year ahead. Global oil demand growth will slow, the agency predicted.
Oil-producing nations around the world are reeling after OPEC initiated a strategy in November to defend its share of global markets by pressuring rivals to curb output. Oil prices, about 45 percent lower than a year ago, may need to decline further to reduce the supply surplus, the IEA said.
Read the story here.