In November, OPEC production increased by 230,000 barrels per day compared to the previous month to average 31.70 million, according to secondary sources, OPEC said. “Non-OPEC supply held at 58.5 mb/d in November, but annual growth slowed to below 300 kb/d from 2.2 mb/d at the start of 2015”.
Advertisement
US spot natural gas prices have fallen below $2 per million British thermal units for the first time on record this week and prices are down 46 percent this year, down by half since mid-2014 when the oil rout began, and 84 percent lower than their 2008 peak.
“Storage levels may provide yet another check on reality”, the IEA said, confirmation for many analysts and traders who say storage is running short and will cause prices to fall.
“Explaining the reason for this sharp slowdown in demand growth, the IEA felt the factors that contributed to a rapid increase in oil use this year are likely to prove temporary”.
“World oil markets will remain oversupplied at least until late 2016 … although the pace of global stock builds should roughly halve next year”, the IEA said in its monthly report.
The steep decline in oil prices had in March forced the National Assembly to settle for $53 per barrel as the benchmark price for the 2015 budget, down from $65 proposed by the Executive.
The International Energy Agency saw global oil demand grow at 1.9 mln barrels a day. There will be “further lay offs to come with oil at $40 a barrel”, he said.
Volatility is likely to remain high for near-term oil prices, with the strong US dollar an additional risk for the market, analysts said.
“The latest OPEC meeting, which concluded by essentially saying that it’s every producer for himself, actually presents a silver lining for the oil market”, said Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas SA.
Saudi Arabia, OPEC’s biggest producer and leader of its current policy, was still thought to be opposed to a production cuts unless countries outside the group co-operate.
The IEA hence underlined that “there is evidence the Saudi-led strategy is starting to work”.
Friday was a weak day for many global markets.
Supply outside OPEC is expected to decline by 380,000 barrels per day (bpd) in 2016, the report said, as output falls in regions such as the United States and former Soviet Union. The position list got tighter, and with the holiday season just around the corner, both markets could have some upward potential.
Advertisement
“Markets don’t necessarily believe that there will be any cutback in production by any of the OPEC members in the very near term and that is ultimately one of the key reasons why we have seen an 8 percent drop over the last week of so”.
