The IEA predicted the decline in investment in the oil sector in 2017

Investment in oil production in 2017 may be reduced due to oversupply in the market. Such assumption was stated by the head of the International energy Agency (IEA), Fatih Birol, reports RŠµuters.

“Our analysis shows that the coming period of great variability in oil prices, which will lead to lower investment in the industry for the third consecutive year,” said Birol. He also stressed that the reduction in investment for the third consecutive year it happens for the first time. In his opinion, this will lead to the emergence of new “challenges” in the global oil market for several years.

The Agency notes that over the past three months the price of oil rose to its highest level as investors and traders expect OPEC countries to reach agreement to limit production.

Previously, Birol said that the producers of shale oil in the US will increase production as soon as the price of oil will rise to $60 per barrel. This means that OPEC will have to maneuver to maintain prices in the case of frozen production.

IEA November 16 presented a forecast of the World Energy Outlook, which challenges the assumption that the peak of world oil demand has already 5-15 years. According to experts of the Agency, “the era of fossil fuels is far from complete.” Fatih Birol said that oil demand “will grow slower than in the past”, but “will still grow.”