Oil dips below $37 as OPEC pumps most in three years

US crude prices remained near 2009 lows in early Asian trading on Friday as oil output in the Middle East continued to rise despite an existing global glut.

“OPEC production rose by 230,000 barrels a day last month, according to secondary sources that track OPEC’s production levels”. WTI crude futures were also at $.75 to $38.26 per barrel.

That’s what weekly Department of Energy data showed Wednesday, with a surprise drawdown in US crude stockpiles of 3.6 million barrels, the first decline in 11 weeks.

“The losses in the oil markets intensified post the OPEC meeting as investors grappled with the new reality of further supply growth from OPEC”.

OPEC’s refusal to cut production, despite the fact that lower prices hurt some poorer nations under its umbrella, comes as part of an effort to weed out shale producers-producing oil at a higher cost than traditional oil producers-and defend its market share.

“Prices have dropped near seven-year lows and haven’t been able to bounce back”, said Tim Evans, an energy analyst at Citi Futures Perspective in NY.

Crude oil prices edged higher in early trade following the larger than expected draw in crude oil inventories. Two more facilities on the west coast – Mangaluru and Padur with 30 million barrels capacity – are expected to be ready soon.

November’s 31.695 million barrel per day total exceeds the anticipated 2016 demand for OPEC crude. Brent lost about $4, or 10 percent, since an OPEC meeting last week that virtually abandoned price support measures.

Crude inventories across the United States fell 3.6 million barrels last week, the government’s Energy Information Administration (EIA) said. On Thursday morning in New York, WTI fell 1% to as low as $36.55 per barrel.

The Organisation of Petroleum Exporting Countries (OPEC) on Thursday estimated a contraction of 380,000 barrels per day (bbl/d) in non-OPEC supply which is set to average 57.14m bbl/d in 2016, a downward revision of 250,000 bbl/d from its previous estimate. It is an indicator of current oil prices and volatility that affect the businesses of the companies engaged in the oil and refining industry.

Analysts said a sharp fall in the dollar on Wednesday may also have spurred some buying as weakness in the USA currency makes dollar-priced oil cheaper.