On the Intercontinental Exchange (ICE), the sell-off in brent futures was even steeper.
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Russian Federation is preparing for the possibility that low crude prices are here to stay as competition between oil and other fuels such as natural gas intensifies.
Brent slipped below $39 per barrel for the first time since December 2008 on Friday. The US benchmark crude closed at a $US2.31 discount to Brent.
Salameh cited the International Energy Agency in Paris that said that “the global demand for oil this year, 2015 has been increasing by 1.4 per cent translating into 1.3 million barrels a day or 1.4 million barrels a day”.
Another day, another dramatic fall in oil prices.
Russian Federation is against an increase in global crude production, rather than favouring a reduction, and remains pessimistic about the possibility of Moscow and Riyadh reaching a production coordination deal, Russia’s energy minister Alexander Novak said Thursday.
But the agency adds there is “evidence the Saudi-led strategy is starting to work”, referring to OPEC’s decision to maintain output to defend market share.
And as the crude markets appear preparing for another plunge, with the bottom still to be seen, Birol is warning of the threats lurking – just round the corner. The key point here is that two countries on this chart are now restricted in their export of oil: Iran and the United States. Prices declined 0.8 percent this week.
“The level of output out of OPEC is spectacular”, Kilduff said.
The report said Iraq’s production rose by an estimated 247,000 b/d to 4.307 million b/d during November, the OPEC report said. Demand growth peaked at 2.2 million barrels a day in the third quarter, but there are preliminary signs that it has eased to 1.3 million barrels a day.
OPEC, which produces about 40 percent of global oil supplies, is seeking to drive out higher-cost producers from the market. OPEC thus feels threatened by the growing USA production and believes it might take over some of its market share.
“Efficient producers of shale oil will remain in the market, and they are using technology to reduce the breakeven prices from $70 to $85 – now it is $60”, Salameh told RT.
USA weather forecasts call for warmer-than-normal temperatures through Christmas that would curb heating demand, boosting US gasoline futures higher than heating oil prices in December for the first time in at least five years.
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Commenting on the proposed $38 per barrel benchmark for the 2016 budget, the Head of Energy Research, Ecobank Capital, Mr. Dolapo Oni, in an emailed response to questions from our correspondent, said, “I think it is a fair price”. “The freewheeling OPEC policy does not – for now – alter the status quo on its supply”. The rig count fell to its lowest level since April, 2010, providing further indications of forthcoming declines in USA output. The EIA put out an estimate, expecting USA shale to lose 116,000 barrels per day in production in January, with the largest losses once again coming from the Eagle Ford shale (down 77,000 barrels per day). The market should tighten balances within the next 12 months.
