DUBLIN - Oil prices are set to remain under downward pressure next year as a weak global economy hits demand with worries for investment projects, the International Energy Agency's (IEA) chief economist said on Thursday.
Oil fell below $50 a barrel on Thursday, with fuel companies planning to store millions of barrels of oil in a bid to shore up prices.
"I think there will definitely be downward pressure on the prices next year," the IEA's Fatih Birol told a news conference during a visit to Dublin. "The economic situation will have an impact on the demand and therefore on the prices."
Oil has lost about two-thirds of its value since hitting a record above $147 in July, in part because a global credit crunch has made investors pull their money out of riskier assets.
Birol, who declined to predict where prices could fall to, said if there was a further fall in oil it would have "important implications" for oil projects especially for those outside of the key oil producing regions.
"If the prices were to slide down further, we may get difficulties to get investments in a timely manner," he said.
Birol said investments were more at risk at the moment in areas not part of producer group the Organization of the Petroleum Exporting Countries.
Non-OPEC producers have been affected by the credit crisis, he said.
"If the trends continue, this will definitely continue and expand to key producing countries," he said. "This will definitely be a bad trend."
Birol said what happens to oil prices in 2010 will very much depend on a recovery in the world economy.
"If the economy starts to recover next year, as many economists suggest, definitely it will be good news and in 2010 we may see a better economic performance worldwide and this may put upward pressure on the prices," he told Reuters.
Oil fell below $50 a barrel on Thursday, with fuel companies planning to store millions of barrels of oil in a bid to shore up prices.
"I think there will definitely be downward pressure on the prices next year," the IEA's Fatih Birol told a news conference during a visit to Dublin. "The economic situation will have an impact on the demand and therefore on the prices."
Oil has lost about two-thirds of its value since hitting a record above $147 in July, in part because a global credit crunch has made investors pull their money out of riskier assets.
Birol, who declined to predict where prices could fall to, said if there was a further fall in oil it would have "important implications" for oil projects especially for those outside of the key oil producing regions.
"If the prices were to slide down further, we may get difficulties to get investments in a timely manner," he said.
Birol said investments were more at risk at the moment in areas not part of producer group the Organization of the Petroleum Exporting Countries.
Non-OPEC producers have been affected by the credit crisis, he said.
"If the trends continue, this will definitely continue and expand to key producing countries," he said. "This will definitely be a bad trend."
Birol said what happens to oil prices in 2010 will very much depend on a recovery in the world economy.
"If the economy starts to recover next year, as many economists suggest, definitely it will be good news and in 2010 we may see a better economic performance worldwide and this may put upward pressure on the prices," he told Reuters.
