Oil prices drops as IEA forecasts weak recovery

Oil prices slipped on Tuesday as the International Energy Agency (IEA) predicted that the oil prices would rebound partially in the next five years.

In its medium-term oil market report, the IEA said the oil prices would recover from the recent low levels of 50 to 55 dollars a barrel, but "the market does not seem to be expecting prices to revisit earlier highs any time soon."

Meanwhile, the IEA trimmed not only its demand estimates but also its supply forecasts. "For the next few years, the global oil market looks set to begin a new chapter of its history, with markedly changing demand dynamics, sweeping shifts in crude trade and product supply, and dramatically different roles for OPEC and non OPEC producers in regulating upstream supply," the IEA said.

After the report, the oil prices slumped for the first time in four days. In the previous session, OPEC said in its monthly oil market report that non-OPEC oil supply is projected to grow by 850, 000 barrels a day in 2015, down 420,000 barrels from the previous assessment.

The crude prices got some support on Friday as data from service company Baker Hughes showed the number of rigs drilling for oil in the country fell by 9 percent to 1,140 last week, the lowest level since December 2011.

Meanwhile, a list of energy giants planned to slash investment this year as lower crude prices bite into group profits.

Light, sweet crude for November delivery moved down 2.84 U.S. dollars to settle at 50.02 U.S. dollars a barrel on the New York Mercantile Exchange, while Brent crude for December delivery slipped 1.91 U.S. dollars to close at 56.43 dollars a barrel.