(MENAFN- ProactiveInvestors)The doom and gloom of oil market prospects continued this week as prices hitting a 6 and a half-year low. The perfect storm of a combination of worst-case scenarios is gathering strength. In mid-day trading on Friday Brent crude was still priced below US$50 with WTI struggling close to US$42 a barrel. Global economic growth is also struggling and these prices are reflecting what we experienced back in 2009 mid recession. Despite the gloom this month's OPEC monthly oil market report was a bit more optimistic. 'Given the better-than-expected growth in global oil demand so far this year together with some signs of a pickup in the economies of the major consuming countries crude oil demand in the coming months should continue to improve and thus gradually reduce the imbalance in oil supply-demand fundamentals.' The International Energy Agency released their monthly report also citing a brighter long-term outlook. The agency says that oil demand is 'growing at fastest pace in five years.' Global oil demand needs healthy economies and the news from growth engine China has been mixed in recent weeks. Growth is definitely slowing and the unexpected Yuan devaluation will put the dollar's position for imported commodities in the limelight for the short term. The investment banks have been busy re-writing their oil demand and oil price forecasts. Citigroup is now looking at a Brent crude average of around US$54 a barrel possibly dropping to US$53 in 2016. The bank sees WTI below US$50 a barrel until later 2016 and Ed Morse head of commodities research at Citigroup wrote in a report this week that he believes 'by this autumn and winter bearish factors look to win out.' The report also examines shale production in the US and notes that shale 'has been holding up more than expected.' With America still pumping at close to full capacity and OPEC member countries delivering all the oil on demand Iraq is gaining dominance again with volumes of more than 4 million barrels a day in July according to the IEA. Iranian oil could soon be on the market and the US Energy Information Administration said it expects that as much as 100000 barrels a day from storage could be on the market before the end of the year. The OPEC monthly report and the IEA seem to be encouraged by the quiet shift upwards in global demand as no one else appears to be talking about it. The IEA says that healthier economies could burn through crude faster than they have in five years especially at this time of low oil prices. The IEA is aware of the over supply but sees world oil demand grow by 1.6 million barrels this year and will continue into 2016. Depending on what you believe in the market these days and who you listen to and trust. The IEA estimates that global oil supply is 3 million barrels higher that global daily demand. This is the highest since 1998 a scenario the IEA is calling 'lower for longer.' How the industry will deal with this is anyone's guess but looking at last months results we can probably expect more spending cuts in the coming year. You can listen to Eithne Treanor's OPEC podcasts here
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