IEA: Oil Prices to Remain Low Until 2020

From this morning’s Fortune CEO Daily email:

Oil prices are unlikely to return to $80 a barrel before the end of the decade, the International Energy Agency said this morning. And if OPEC continues its policy of pumping oil at record rates to increase market share, they could remain close to $50 a barrel through 2020.

The agency’s World Energy Outlook is closely watched by the industry, and its new report is likely to dash any remaining hopes of a quick oil rebound. Slower global demand, improvements in efficiency, and growth in alternative energy sources are all taking their toll. You can read the full report here.

The agency also noted that wind and solar energy accounted for half of all new power plants in 2014 – while growth of coal is slowing, after rising to 29% of the global energy mix from 23% in 2000. But the agency warned that more conventional generating capacity will have to be put in place in the coming decades to deal with the intermittent nature of wind and solar. You can see the effects these days in Texas, where an abundance of wind energy has led companies to offer free electricity between 9 p.m. and 6 a.m.

It’s amazing to me that experts can predict this, but they couldn’t predict the drop in price in the first place. I don’t remember seeing or reading anything forecasting oil prices dropping in 2013 or 2014. Anyone else? Did I miss something?

Maybe this will put to rest the idea that big oil sets the price of oil. I can promise you that if they did control the price, oil wouldn’t be sitting at under $50 per barrel right now.