01:57 GMT22 February 2020
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    According to the Spring 2017 Economic Forecast, European Commission revised its forecast of the Brent oil price saying that a barrel would cost $55.5 this year instead of the earlier predicted $56.4.

    MOSCOW (Sputnik) The European Commission revised its forecast of the Brent oil price saying that a barrel would cost $55.5 this year instead of the earlier predicted $56.4, the Spring 2017 Economic Forecast issued on Thursday said.

    "Assumptions for Brent prices have been revised slightly downwards to an average of 55.5 USD/bbl in 2017 and 55.9 USD/bbl in 2018, 1.6% lower than in the winter 2017 forecast," the report said.

    The revision of the forecast is caused by the fact that previous assumptions of global oil supply and demand turned out to be incorrect.

    "Global oil supply stood at 96.5 bbl/day in February, which is below the International Energy Agency (IEA) projection for 2017-Q1 global consumption of 96.7 million bbl/day, implying slightly declining inventories. The IEA’s projection for global oil demand growth in 2017 is 1.4%, which is below the 1.6% increase recorded in 2016," the report said.

    Oil market turbulence caused oil prices to plunge from $115 a barrel in June 2014 to less than $30 per barrel in January 2016, causing problems for oil exporters.

    Last November, the Organization of the Petroleum Exporting (OPEC) countries agreed to reduce oil output by 1.2 million barrels per day for the first six months of 2017, with a daily cartel-wide cap standing at 32.5 million barrels. In turn, non-OPEC producers agreed to jointly slash their output by 558,000 barrels a day.

    The deal expires in June. The signatories are expected to discuss whether the agreement, which seeks to shore up oil prices, should be extended for another six months.

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