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Oil’s new mantra: ‘A lot lower for a lot longer’

An Iranian oil worker rides his bicycle at the Tehran's oil refinery south of the capital Tehran. A European oil embargo on the world's seventh-largest oil producer has ended following the lifting of trade sanctions last weekend.

The first mantra from the oil crisis was “lower for longer.” Then “lower for even longer.” Now in Davos, oil executives are beginning to speak – in other words, whisper – in regards to a new nightmare scenario: “A great deal lower for a lot longer.”

Oil executives, policy makers and banks said within the first times of the World Economic Forum that a recovery will stay elusive in 2016 as major producers keep pumping and China’s fuel appetite slackens. Plus they fret that prices could take another hit as Iranian crude freed from sanctions flows back on to world markets.

“It is the third year consecutively we’ve more supply than demand,” Fatih Birol, executive director of the International Energy Agency, told Francine Lacqua inside a Bloomberg Television interview. “When we look at the 2016 demand and supply situation, prices is going to be still under pressure. I don’t use whatever reason we have a surprise increase in the price in 2016.”

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