Report informs, it is said in a report of organization released in August.
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Short interest – betting that the price will fall further – in the “black gold” commodity is even greater than it was in January, when the price of oil plunged to the low $30-range. “Oil prices are likely to remain at the lower end of the recent trading range over the next couple of months”.
Oil prices extended losses on Wednesday after industry data showed a rise in USA crude stockpiles, supporting oversupply concerns. Brent, the global benchmark, declined 93 cents, or 2.1%, to $44.05 a barrel on ICE Futures Europe.
Oil prices have declined following improved prospects for USA production and an excess supply of crude and refined fuel products.
The EIA added to the market’s unease when on Tuesday it forecast a smaller decline in USA crude oil production in 2016 than it projected a month ago as drilling activity picks up.
The OPEC also raised the oil demand outlook for 2017 by 90,000 barrels daily to 95.41 mln barrels per day (up 1.15 mln barrels daily). That’s over a million barrels a day more than it produced on average in 2015 and 2 million more than in 2014. “Corrections are already being made this morning as traders remember the weight of oversupply and falling demand, especially in China”. The report also includes production data reported directly by member countries, which showed Saudi output rising by 123,000 barrels a day to 10.673 million a day.
“After a significant recovery for five consecutive months from its lowest value in years, the ORB (OPEC Reference Basket) slipped almost 7 percent in July, falling against a backdrop of less-than-anticipated demand, high stocks, particularly of refined products, and rising supply”. Consumption will pick up in the Northern Hemisphere as winter approaches, reversing some of the discount on oil prices for immediate delivery and whittling away the excess in inventories, OPEC forecast.
OPEC, which controls more than a third of the world’s oil supply, said its July crude production inched up 46,000 barrels a day to 33.11 million barrels a day on higher output from Iraq and Saudi Arabia. It would break the previous record set in 2007.
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All of this is fueling speculation that major oil producers could announce moves to stabilize oil prices, which recently fell back below $40 a barrel from over $50 two months ago. Iran still opposes any limits on its production, with the country seeking to reclaim its pre-sanctions share of OPEC’s total output before contributing to any production freeze, according to an OPEC delegate who asked not to be identified.
