In early 2016 crude oil prices for WTI and Brent fell below $30/bbl for the first time since 2003, having halved in just a few months. In a departure from the past four decades, producers continue to produce and sell what they can, letting the market set the price. Low prices are a major short-term benefit to consumers and will provide a boost to demand growth. But if low prices persist, investments in new supply are cut back - as has been demonstrated recently by a succession of announcements from major companies. Unless the heavily oversupplied oil market can return to balance and high levels of stocks start to diminish, oil prices cannot rise to the levels necessary to support investments in the higher cost resources that must be developed to meet rising oil demand. The result could be a sharp rise in oil prices that risks curtailing economic growth.In the 2016 edition of its Medium-Term Oil Market Report, the International Energy Agency analyses the key factors impacting the supply and demand for oil from today out to 2021. These include: high-cost
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