The International Energy Agency provided a warning to the consumers not to let the low oil prices to lull them into thinking they are secure. It said that forecasts indicate the prices may shoot up by 2021.
In their report, IEA said that 2017 would see the oil prices start to recover.
This would however be followed by sharp increase in the oil price as a result of the struggling to invest in the sector.
The Executive Director of IEA, Fatih Birol, said that consumers may easily be lulled into a sense of security by the current low prices but they should be cautious enough to take the warnings.
Stocks in enormous amounts
The policy advisor projects a global growth in oil supply by 4.1 million oil barrels daily from 2015 to 2021. This is a low compared to the 2009 to 2015 period where it was 11 million oil barrels per day.
Also, investment in oil production is expected to decline. IT will reduce from 24% last year to 17%.
The policy advisor further said that only 2017 will see an alignment between oil supply and oil demand. When the oil prices start to recover, there will be a certain balance and after that, the stocks will once again start to be drawn down.
The performance of oil prices has been declining due to increased production by the major stake holders. Also, they are all not willing to settle down and discuss on how to combat the situation.