FXStreet (Delhi) – Research Team at BBVA, suggests that market fundamentals are behind oil prices drop and further declines are likely. Key Quotes “We expect a modest rebound in 2H16-2017 with long-run equilibrium price at around $60/bbl as structural trends limit upside risks. Our new baseline scenario implies downward revisions to the short-run with a gradual recovery thereafter. Oil prices to decline further in 1H16 because of • OPEC reluctance to cut production - Given OPEC’s low production costs, further price declines cannot be ruled out. • Additional supply from Iran - Despite the drastic correction in prices, excess supply persists while inventories remain at all-time highs. • Resilient U.S. crude production - Resilient non-OPEC production exerts downward price pressures. • Dollar appreciation • Concerns on weaker economic growth” For more information, read our latest forex news.