A pair of new forecasts for oil prices are offering little optimism for a battered industry looking for signs of a recovery.
Global oil markets could "drown in oversupply," sending prices even lower as demand growth slows, according to the International Energy Agency.
"So the answer to our question is an emphatic yes. It could go lower."
As sanctions lift on Iran, the country could add 300,000 barrels a day in the next few months and 600,000 barrels a day by the middle of the year, the IEA said in its latest report. The agency suggests that level of production could be enough to pressure prices further around the world.
Oil prices have fallen by about 73 per cent in North America since the peak in 2014. U.S. crude oil inventories are at record highs and could go higher.
The rebalancing in the market could be delayed until well into 2017, according to Martin King, a commodities expert with FirstEnergy Capital.
"Low prices mean the end of low prices at some point. Supplies will be impacted. Demand will grow. It is still growing. This market will find balance," said King during a market update presentation in Calgary on Tuesday.
King says oil prices will likely average around $36.75 US a barrel in 2016. That's a drop from his December forecast of $49.75 for this year.
Graph shows the sharp fall of oil prices in North America. (FirstEnergy Capital)
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