Oil prices remain extremely volatile, down another 5% today as the International Energy Agency (IEA) and Goldman Sachs (NYSE:GS) remained divided over the outlook for the commodity. According to a report from the IEA, global oil output in the first half of the year will climb faster thanks to contributions from Iran and Iraq to supply.
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IEA sees no respite
The IEA warned that supply may run in excess of 1.75 million barrels per day over demand against anearlier estimate of 1.5 million per day made last month. At the same time, the agency anticipates global demand to slow down further, which will also put pressure on oil prices.
The decline in output by non-OPEC members will be marginal at 0.6 million barrels per day in the current year, according to the agency.
Further, the IEA had put to rest speculations over a possible meeting between OPEC and non-OPEC members over containing oil production, stating that it is solely an individual choice of its members. According to IEA, any such cooperation is doubtful in the near future.
The ominous report appears to have taken affect today, as WTI and Brent crude are down 5% and 7% respectively on the day.
Goldman Sachs more positive
A report from Goldman Sachs, in contrast to the IEA, asserted that crude will recover at a pace higher than precious metals. The firm cited the supply-side adjustment factor as playing a key role in the fast recovery of oil over metals. The iPath S&P GSCI Crude Oil Total Return (NYSEARCA:OIL) is down 5% to $4.48 on the day.