Oil prices are unlikely to reach $60 per barrel anytime soon as hawkish forecasters continue to ignore the "elephant in the room", a senior economist told CNBC Wednesday.
Daniel Lacalle, chief economist and investment officer at Tressis Gestion, said: "The bulls of the oil market are missing the elephant in the room which is efficiency and technology. It takes away every year — no matter what they say — it takes away estimates of growth of demand in the region of around 500,000 to 600,000 barrels per day."
He went onto say that while had successfully propped up oil prices with its attempts to drain a global glut of crude oil, it had also failed to recognize a "much bigger problem."
"The level of investment which has been taken in the last decade has created an overcapacity that is simply impossible to offset with a Chinese economy moving into a different state. (China) is less about a massive use of commodities and more into the services business," he said.
China is increasingly counting on growth in the services sector, especially high value-added services in finance and technology, in order to curb the economy's traditional reliance on heavy industry and investment.
The price of oil collapsed from almost $120 a barrel in June 2014 due to weak demand, a strong dollar and booming U.S. shale production. OPEC's reluctance to cut output was also seen as a key reason behind the fall. But, the oil cartel — along with other oil producing nations — in late 2016.
On Thursday, the International Energy Agency (IEA) said the global outlook for oil markets in 2018 could put a dampener on hopes for higher prices. In its closely-watched report, the IEA said global stock builds, rising non-OPEC production and static oil demand could weigh on the oil price.
The IEA's comes amid optimistic comments from the major oil producer group OPEC, with the cartel arguing there was evidence of the global oil market rebalancing following several years of low prices.
Meanwhile, Giovanni Staunovo, commodity analyst at UBS Wealth Management, told CNBC Wednesday that "relatively muted" supply growth in the final three months of the year would be supportive for oil prices in the fourth quarter. He also suggested oil prices could climb close to $60 a barrel in the "very short run."
"I believe the main driver for this price environment that we trade now, and what we should trade over the coming three months, is that demand growth will be stronger than supply growth," he said.
Staunovo also stressed the importance of oil market conditions from the previous year when forecasting price movements for the end of 2017. He added that if OPEC kingpin Saudi Arabia followed through with its commitment to cut exports to 7.2 million barrels per day year to date, then that would represent an absence of 1 million barrels per day when compared to the same period 12 months earlier.
Brent crude traded at around $56.68 a barrel Thursday morning, down 0.49 percent, while U.S. crude was around $50.84 a barrel, down 0.92 percent.
— CNBC's Holly Ellyatt contributed to this report.