The Organization of the Petroleum Exporting Countries in a report also forecast supply from non-member countries will fall more sharply next year, which would suggest its strategy, reaffirmed last week of defending market share, is working. 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.
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OPEC’s output was 31.695 million b/d in November, up 230,100 b/d from 31.465 million b/d the previous month, according to the latest OPEC report. USA crude production will decline by 415,000 barrels a day to 12.4 million a day, the IEA predicted.
WTI settled on Friday near $35 a barrel for the first time since February 2009 after the International Energy Agency warned that the global oversupply of crude could worsen next year.
The relentless fall of global oil prices spurred another sharp drop in global share markets Friday, as panicked investors fled the energy sector and financial stocks as well. Its output, however, fell in October by 195,400 barrels a day as storms delayed the country’s main terminal in the south.
Both commodities have fallen by more than 10 per cent over the week since unity among OPEC members finally collapsed, leading to fears that gulf producers would continue to raise production, no matter the price. Vehicle sales were up 20 percent in November from a year earlier to 2.5 million vehicles, the China Association of Automobile Manufacturers said.
NYMEX-traded WTI (West Texas Intermediate) crude oil futures contracts for January delivery fell by 1.1% to $36.76 per barrel in yesterday’s trade.
January Brent crude on London’s ICE futures exchange slipped 38 cents, or 1%, to $39.73 a barrel.
Non-OPEC supply growth shrank to below 0.3 million bpd in November from 2.2 million bpd at the start of the year. While talking to CNBC on Thursday, Credit Suisse Managing Director and Global Head of Technical Analysis, David Sneddon, said that Brent prices have found support at these levels in the past 25 years.
“Focus now turns to the Baker Hughes drill rig count this evening”, he said, referring to an inventory of active oil drilling rigs in the United States indicating production activity. Stockpiles reached 190 million barrels in mid-this year, while it targets 550 million barrels by 2020.
Many wells taken off the market will not return until the price gets stronger, but the industry is beginning to adapt to a “lower for longer” price scenario.
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The International Energy Agency (IEA) expects oil prices to remain low through 2016, but forecasts a rebound to begin in 2017 as the current oil glut recedes and demand rises.
