The International Energy Agency believes that oil prices won't climb much higher this year after reaching 2011 record highs in March. The group sees market pressures easing despite 'plummeting' supplies from Iran.
After oil prices had been rising steadily since the end of 2009, they had started falling again since March, IEA said in its latest monthly report published Thursday.
Forecasting 2012 oil demand at 89.9 million barrels per day, the Paris-based energy watchdog said that the current environment showed a clear shift from the "seemingly relentless tightening" evident in the past 10 quarters.
Oil prices had fallen by $5 (3.80 euros) per barrel since March because of "Saudi supply assurances, market speculation on a potential strategic stock release and hopes pinned on multilateral talks over Iran's nuclear program."
"We cannot discount the possibility that prices will remain high so long as geopolitical uncertainties remain. But for now, at least, the earlier tide of remorseless market tightening looks to have turned," the report said.
In its previous report released in March, the IEA had still warned of a "heady brew of both real and anticipated supply-side risks" as tensions over Iran's nuclear program were mounting.
Iran still on the agenda
Iran is due to resume talks with Western nations this weekend, in the hope of coming up with "new initiatives" to break the deadlock over its alleged nuclear weapons program.
The talks come against the background of a Western oil embargo, which the IEA expects will hit Iran's oil industry.
"The long list of countries planning to implement import cuts suggests Iranian oil output to plummet to 2.6 to 2.8 mbd by mid-summer, unless alternative buyers can be found," it said.
In March, Iran extracted 3.3 million barrels of oil per day - already some 250,000 bpd less than before sanctions were imposed at the end of 2011.
uhe/ng (AFP, Reuters)