The agency said slightly higher OPEC crude output accounted for most of the increase in global oil supply in November, while non-OPEC supply was unchanged and annual demand growth slowed. “As inventories continue to swell into 2016, there will still be a lot of oil weighing on the market”.
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The report found U.S. light tight oil – or shale oil – production could fall by 600,000 barrels a day next year.
The price of Brent crude oil fell below $39 a barrel at one point, its lowest since December 2008. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
“Global inventories are set to keep building at least until late 2016, but at a much slower pace than observed this year”, the Paris-based IEA said in its latest monthly report.
U.S. shale oil production, the main driver of non-OPEC supply growth, is expected to fall for a ninth consecutive month in January, according to a forecast on Monday from the U.S. Energy Information Administration.
“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. Prices along the oil futures curve are now below $60 a barrel all the way through 2024, a sign that a recovery is still far off.
January Brent crude on London’s ICE futures exchange slipped 38 cents, or 1%, to $39.73 a barrel.
In the near term, analysts expect oil price volatility to remain high, with the strong US dollar an additional risk for the market.
ConocoPhillips’s plan to cut spending to US$7.7 billion comes a day after Chevron Corp disclosed a 2016 budget 24 per cent smaller than this year’s.
“Upending year-earlier forecasts that Chinese gasoline demand would struggle in 2015, confirmed data for the first ten months of the year show growth of roughly 10.4 percent year-on-year” the International Energy Agency said in its monthly oil report.
Last month, OPEC pumped 31.695 million barrels of crude per day, an increase of 230,100 from its level in October.
For the first time in decades, OPEC oil ministers dropped any reference to the group’s output ceiling, highlighting disagreement among members about how to accommodate Iranian barrels once Western sanctions are lifted.
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Meanwhile the IEA said that the decision by the OPEC oil cartel to continue its policy of targeting market share rather than price “does not — for now – alter the status quo on its supply”. The world’s largest oil cartel triggered a prolonged downturn in crude prices last November by ignoring calls to slash production in an effort to maintain market share.
