Singapore: Oil prices fell in Asia on Tuesday after the International Energy Agency (IEA) predicted that global oil prices will recover only partially over the next five years, analysts said.

US benchmark West Texas Intermediate (WTI) for March delivery slipped 74 cents to $52.12, while Brent crude for March eased 77 cents to $57.57 in afternoon trade.

Citing a major shakeup in the oil markets, the IEA said in its five-year forecast that prices will recover from current levels of around $50-55 per barrel to $73 per barrel in 2020.

That is considerably below the more than $100 price tags reached before they began to fall in June.

New chapter

"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.

It added that it sees market rebalancing occurring "relatively swiftly", with increases in inventories halting mid-year and the market tightening.

"This morning's slight dip is likely due to the IEA report that predicts only a slow recovery for oil prices. However this is only in the short term as the market fundamentals have not changed," said Shailaja Nair, associate editorial director at energy information provider Platts.

Prices have plunged from their mid-2014 peaks largely owing to a surge in global reserves boosted by robust US shale production and weak global demand.

Downward market pressure

Oil prices may come under more downward pressure before recovering later this year as ample supplies push inventories higher, perhaps towards record highs, the energy watchdog said on Tuesday.

The IEA said in its monthly report that supplies remained abundant and that it would take time for investment cuts to make more than a relatively small dent on production, keeping prices low.

"Despite expectations of tightening balances by end-2015, downward market pressures may not have run their course just yet," said the IEA, which advises major industrialised countries on energy policy.

The agency said that, "barring any unforeseen disruption, OECD stocks may by mid-2015 come close to revisiting the all-time high of 2.83 billion barrels reached in August 1998, shortly before (US oil) prices sank to an average monthly low of $11.22 per barrel."

Despite the glut, the IEA said that prices would likely rise later in the year as "market participants are seeing light at the end of the tunnel and growing confident that spending cuts by oil companies will lead to a market recovery".

Medium term

The report also said measures taken to balance the oil market this year could matter more in the next five to six years than in the near future as "today's investment decisions typically take years to translate into physical supply/demand reality".

The IEA said in a separate report on Tuesday that the United States would remain the world's top source of oil supply growth up to 2020, even after the recent collapse in prices, defying expectations of a more dramatic slowdown in shale growth.

The agency said in its Medium Term Oil Market report that oil prices, which slid from $115 a barrel in June to a near six-year low close to $45 in January, would likely stabilise at levels substantially below the highs of the last three years.