Oil prices rise as investment declines

Brent crude, the global oil benchmark, was up 0.25 cents at $47.44 a barrel, having fallen for four trading days in a row. US crude rose 0.30 cents to $44.17 a barrel.

The IEA said oil was unlikely to return to $80 a barrel before the end of the decade, despite cuts in investment, as annual demand growth struggles to top one million barrels per day.

In its World Energy Outlook, the IEA also estimated investment in oil would decline more than 20 per cent this year and the trend would continue into 2016.

Oil majors have cancelled 80 projects across the world this year because of low oil prices and cut capital spending by as much as $22bn, BP’s head of exploration and production Lamar Mckay said.

The decline in investment, however, has not been enough to reverse oil’s price weakness.

Carsten Fritsch, senior oil analyst at Commerzbank in Frankfurt, said he expected Brent to remain stuck between $47 a barrel and $52 until the end of the year.

Further evidence of stockpiling, expectations of a rise in US rates and anaemic economic growth figures have helped push down prices recently.