People work at the Halfaya oilfield in Amara, southeast of Baghdad, Iraq.

Essam Al-Sudani | Reuters

People work at the Halfaya oilfield in Amara, southeast of Baghdad, Iraq.

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 OPEC 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.

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