Crude production rose to three-year high in November: Opec

The most realistic scenario is that the Brent prices will go up to $60-$80 levels by 2020, while the supply and demand rebalancing could start to affect prices already in 2016. Both grades reached their lowest settlement value since February 18, 2009.

“Inventories are insane high at the moment”.

He said Malaysia’s fiscal position would be impacted the most if oil price dropped to US$20 per barrel as the level was unsustainable for domestic petroleum production.

The OPEC Reference Basket declined around 10 percent in November as lower refinery crude intake added to the oversupply in the market, according to OPEC monthly oil market report for December.

“OPEC, really, for all intents and purposes is now just a visit to Vienna”, he said, referring to the group’s annual meeting location.

The IEA said OPEC’s decision last week to impose no ceiling on its output appeared to signal a renewed determination to maximise low-priced OPEC supply and drive out high-cost non-OPEC production regardless of price.

After the “tremendous” growth of 2.23 million barrels per day last year, the group now expects growth this year to have been a “much slower” 1 million – but up from its previous projection of 280,000 barrels. How hard and well the country copes with these new challenges will define Korea’s status after this trend of low oil prices finally ends.

Output from OPEC rose in November by 230,100 barrels per day to a daily total of 31,695 million, which is its highest since April 2012.

Crude inventories fell 3.6 million barrels in the week to December 4, compared with analysts’ expectations for an increase of 252,000 barrels, U.S. Energy Information Administration (EIA) data showed.

Futures of US ultra low sulfur diesel, also known as heating oil, slumped more than 2 percent. Saudi Arabia, OPEC’s kingpin and the world’s largest oil exporter, saw its production falling by 25,200 barrels a day to 10.130 million barrels.

Industry experts say the next OPEC meeting in June will be crucial, especially if oil prices have not improved by then.

“In particular, we see potential for a temporary undershoot by prices to 2008 financial crisis lows around $36 per barrel for Brent”, BMI said on Thursday.

Iran, which once pumped around 4 million barrels a day and is now down to about half that, is preparing to come back fully on line once it sheds nuclear-related sanctions in a few months. But the EIA also released bearish data showing inventories of distillates soared 5 million barrels, double what had been forecast and the sharpest rise since January.