Data also showed Opec pumped 31.7mn bpd in November, more oil than any month since late 2008. “The back months have actually been hit a bit harder than the fronts as the report dispelled thoughts that a price recovery was on the not-too-distant horizon”.
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Brent futures are down more than 5.5 percent this week and having dipped below $40 per barrel there are renewed concerns about a test of 2008’s low around $36. North Brent Sea crude for January delivery wavered between $37.37 and $39.74 a barrel, before closing at $37.90, down 1.83 or 4.62% on the day.
“The level of output out of OPEC is spectacular”, Kilduff said.
European benchmark Brent oil for January delivery shed 38 cents to US$39.73 a barrel in London.
And near 7:20 a.m. ET in New York, Dow futures were down 136 points, S&P 500 futures were down 13 points, and Nasdaq futures were down 33 points – all pointing to a lower open on Wall Street.
Crude prices had already been falling, weakened by warm weather that cut seasonal demand for heating oil and on a strong US dollar given expectations of a Federal Reserve interest rate hike in December.
Domestic crude on Friday tumbled below $36 a barrel after the International Energy Agency said global demand growth – propelled by motorists in the United States, China and India this year – is set to slow by a third in 2016. It was down $1.10, or 3 percent, at $35.66, hitting an intraday low at $35.35.
Oil futures dropped as much as 1 per cent in NY and are down 8.6 per cent this week. OPEC’s daily output has eclipsed its production ceiling of 30 million barrels per day by at least 1 million for the majority of the year. As a result of low oil prices in oil producing countries and the worldwide companies having no option but to shut down their expensive oil fields, the flow of oil into the global markets will slow down and lead to taking out some surplus crude oil around three million barrels.
With OPEC’s output at its highest since 2012, the organisation issued its final monthly report for the year on Thursday.
According to the OPEC report, fall of oil supply to the global market is expected on all the countries of the former Soviet Union (FSU) in 2016.
According to the latest price updates, released on OPEC website, the Cartel’s basket oil price decreased by more that $3 on Dec.9, compared to December 3 when OPEC members start 186-th Ordinary Meeting.
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“If they devalue their currency, which is a little bit of what’s happening today, the commodity becomes more expensive locally and that could drive demand lower”, Mr Dayen said.
