OPEC oil output reaches 7-year high

Its report said world oil demand in 2016 is uncertain, “depending on the pace of economic growth, development of oil prices, and weather conditions, as well as the impact of substitution and energy policy changes”.

Opec countries last week failed to reach an agreement on production quotas, leading to fears that increased production from Iran and elsewhere would deepen the glut further.

West Texas Intermediate (WTI) U.S. crude futures were down 11 cents at US$37.05 per barrel, erasing early gains. The organization is pumping about 900,000 barrels a day more than it anticipates will be needed next year.

OPEC, looking to maintain market share in the face of fierce competition from top non-OPEC producers such as Russian Federation and the United States, did not set a new production ceiling at Friday’s meeting in Vienna.

As per data released by India’s petroleum ministry, its crude basket fell below the $40 per barrel mark for the second time in a month on Monday, following a decision by the Organisation of Petroleum Exporting Countries (OPEC) last week to keep producing optimally.

OPEC yesterday said that it expects oil production by nations outside the group to fall next year by more than it previously forecast, in a sign that its audacious strategy might be working at last.

OIL PRICES settled lower on Wednesday after traders and investors ignored an unexpected drawdown in US crude stockpiles to focus on a build in distillates, including diesel, that came in twice more than expected.

Crude oil prices remain at levels not seen since early 2009.

Friday’s news pushed oil prices down, with the USA benchmark rate sliding 2.7 per cent on the day to $39.99.

Nevertheless, he said, certain sectors of the economy, were benefitting from the current situation, especially those heavily dependent on oil and gas such as aviation, transportation and manufacturing. It increased estimates for non-OPEC supply in 2015 by 280,000 barrels a day.

Now that oil is struggling to find support around $40 per barrel, growth in US tight oil may be curbed as much as 40%.

Inventories at Cushing, Oklahoma, the delivery point for the U.S. contract, added 0.4 million barrels to 59.4 million barrels.

The EIA estimated that global oil inventories increased by 1.3 million barrels per day last month amid an ongoing supply glut that’s depressed prices.