Analysts predict $35/bbl crude by 2016-start: Platts

The deal between Iran and the West has sent crude prices lower. Brent is down to USD 56 per barrel. WTI Nymex is down to the USD 51 dollars per barrel.Stuart Elliott Associate Editorial Director, Platts told CNBC-TV18 the price reaction witnessed on crude was not as expected because it was down only a dollar or so.The oil prices are fairly balanced but the big question now is what will happen to prices when the Iranian oil hits the market. However, that is unlikely to happen till the end of this year probably, Elliot said, adding any big price correction was likely to happen only then. 

He said, some analysts predict the price to drop another USD 5 - USD 15 per barrel, and so crude prices could go as low as USD 35/bbl at the beginning of 2016. Crude prices have nearly halved between June last year till now. 

However, according to the International Monetary Fund (IMF) lower prices will only help fire up global growth engines. In a discussion paper titled “the global implications of lower oil prices", the IMF argues cheaper oil could see global growth jump by 50 basis points. But in the same breath, it cautions that financial strain in some countries due to the fall in prices could offset these benefits.When asked what he thought would be the reaction of OPEC now, Elliott said that OPEC currently has decided not to intervene. However yesterday the Algerian oil minister said he would call for an emergency meeting if circumstances warranted it. If prices were to fall lower, then some of the poor members of OPEC might push for a meeting to bring about some change but the group led by Saudi Arabia could decide that market share was more important than price. The way things have looked in the last year, OPEC would let the market to carry on and allow Iran to produce more oil, which would lead to fall in prices, said Elliott.