Oil prices to fall further (and not just because of the IEA)

Oil prices have probably overreacted to the International Energy Agency’s (IEA’s) decision to release emergency stockpiles, just as they overreacted (in the opposite direction) to OPEC’s decision to leave production quotas unchanged earlier this month. Looking past the recent volatility, the medium-term prospects for oil prices continue to depend primarily on the outlook for demand, geopolitical risks in the Middle East, and developments in financial markets more generally.