Angola’s crude oil output dropped from 1.762 million bpd in October to 1.722 million bpd last month.
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Tuesday is the final day of trading for Brent’s January contract.
“Markets had time to prepare for this day, with investors winding back risk ahead of the event”, said Tim Schroeders, a portfolio manager who helps oversee about US$1 billion in equities at Pengana Capital Ltd.in Melbourne. If oil drops to about $30/bbl, OPEC “will find the need to protect prices as internal discord and conflicts among themselves persist”.
That would require West Texas Intermediate crude, the American benchmark, to slump “to the high US$20s” from about US$37 now, the bank said.
“OPEC’s strategy seems to be working”, writes The Atlantic’s Bourree Lam. “Low oil prices have already led to rig closures across America, and it’s expected that high-cost oil-production (the sort that is common in the US) will be the first to be edged out of the market altogether”.
Brent for January settlement, which expires Wednesday, slid 24 cents to $37.68/bbl on the London-based ICE Futures Europe exchange.
After falling for six consecutive sessions, oil prices ended Friday with WTI at its lowest point since February 2009 and Brent down to a level last seen amid the 2008 global financial crisis.
Congressional leaders have reached a deal to lift the 40-year-old ban on exporting USA crude in a symbolically important move that could give domestic oil producers much more flexibility in future.
Moody’s forecasts that global oil demand will rise by roughly 1.3m barrels per day in 2016, an increase from its previous assumptions as oil consumption picks up in countries such as the US, China, India and Russian Federation.
“Land storage capacity is now limited but OPEC keeps increasing production so the oil price is relentlessly trending down”.
Crude oil prices tumbled Wednesday, extending 6-year lows after the Federal Reserve hiked interest rates for the first time in a decade.
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OPEC is flooding the market with cheap oil to try to squeeze out the more costly producers, but the process has been more painful and longer lasting than expected. “We’re not in the case where there’s not enough crude coming out of OPEC, for example”. The Organization of the Petroleum Exporting Countries (OPEC)in its December 4 meeting failed to agree on an output ceiling, raising the stakes in a battle for market share that began at the end of 2014 against the wishes of some members with fragile economies, such as Venezuela, Nigeria and Ecuador.
