OPEC supplies rose to 31.77 million barrels per day in November, from 31.64 million the previous month, according to Reuters.
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The International Energy Agency delivered its final report on Friday.
In what the IEA described as an “unrelenting oversupply”, supplies are gushing out at 1.8 million barrels a day (mb/d) more than a year ago. The report read: “Global inventories are set to keep building at least until late 2016, but at a much slower pace than observed this year”. Prices fell due to pessimist sentiment stemming from oversupply.
OPEC continues to show strength and belief that oil prices will eventually rise and instead of selling fewer barrels of oil for higher prices.
LONDON-Oil tumbled to fresh lows Friday, with the US benchmark price slipping below $36 a barrel after a top energy watchdog said low prices are taking a toll on supply but that isn’t yet enough to relieve the global crude glut. Its plan to cut spending to US$7.7 billion comes a day after Chevron Corp. disclosed a 2016 budget 24 percent smaller than this year’s. The agency anticipates that US domestic output will decline by 415,000 bpd, comprising almost 70% of the total non-OPEC declines.
This is where companies can only pay interest on outstanding loans in an effort to survive. The market should tighten balances within the next 12 months.
The agency says that defaults are now as high as back in 1999 and the future looks bleak.
The prospect of higher rates boosts the greenback, which in turn makes dollar-priced crude more expensive for buyers using weaker currencies.
Oil prices closed at a seven-year-low Thursday and continued to drop on the overnight markets.
For the first time in decades, OPEC oil ministers dropped any reference to the group’s output ceiling, highlighting disagreement among members about how to accommodate Iranian barrels once Western sanctions are lifted.
“Rapid gains in OECD oil demand growth may be on the verge of a sharp deceleration if the latest preliminary indicators of US, German, French and Japanese deliveries can be used as a “canary in the mine”.
However, the extra 230 million barrel capacity in the U.S. is more likely to extend the overhang of supply as demand wanes.
While Saudi Arabia believes to protect market share and to win non-OPEC producers the cartel has to keep pumping crude into market as it predicts the demand for oil will increase in the coming year.
In its monthly Oil Market Report, the Paris-based IEA, the key energy advisor to the OECD, found a nine-month long rally of strong demand growth for oil in the U.S. came to an abrupt halt in September.
With just three weeks left in the year, the state of the oil market is unlikely to improve.
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European shares opened at a two-month low.
