Crude oil prices have dropped below $35 per barrel, the lowest since 2009.
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Oil prices have fallen to their lowest since February 2009 as the two main benchmarks are looming below US$36, close to the low prices of 2004 and 2008, as fears grow that the prices may fall well below those records early next year due to a price row between top producers.
A growing number of traders are, nonetheless, positioning themselves for notably higher prices a year from now through the purchase of bullish call options.
The global benchmark Brent was down 2.44 percent Monday morning at US$36.68 a barrel.
Indeed, some banks are now holding a more bullish view on the crude market.
Its 2016 budget is based on an oil price of $50 per barrel, Siluanov said. “Iran may return to the market in January which is causing concern of increasing oversupply amid a mild winter”, said Berentsen.
The glut is a result of oversupply, yet global gasoline demand has been strong, thanks to rising auto sales.
Some dealers suggested the spread was responding to signs from Washington that legislators may finally throw out a 40-year old ban on exporting US crude as part of broader tax and spending legislation.
In November, Russia continued extracting oil at a post-Soviet high of 10.78 million barrels per day despite weak oil prices. This report also showed lower refinery inputs, meaning lower demand for crude oil.
Ceiling scrapped In addition, the group scrapped its official production ceiling and took away any pretence of output constraint.
The slump has created dozens of “zombies” among shale-drillers, a term used to describe companies that have just enough money to pay interest on debt but not to drill sufficient new wells to replace older ones that are drying out.
The plunge in oil prices, which has been spurred by excess global supplies, continues to be a drag on inflation, which raises doubts about further action from the Fed.
“We think the outlook for 2016 is brighter”. The main driver of oil consumption growth in the past 5 years, is not supporting anymore and this is an additional downtrend supporting justification for speculators to increase their short positions. The oil market is now oversupplied to the tune of about three million barrels a day.
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Bouvier, meanwhile, claimed Japan and China would be the main beneficiaries of lower oil prices as they are among the world’s largest energy importers and said the “unexpected boon” for the countries’ would help fund investments across Asia. Iranian Oil Minister Bijan Namdar Zanganeh asked the OPEC to reduce production by at least 1.3 million barrels per day (mbpd) on December 1.
