Oil Set for Longest Slide in 9 Months Under OPEC Output Pressure

The IEA projected that the rate of growth in global demand for crude would slow to 1.2m barrels per day in 2016 from the 1.8 mb/d rise seen this year.

USA crude futures were at $36.53 per barrel, down 23 cents and just above Thursday’s bottom of $36.38 – the benchmark’s lowest mark since February 2009.

WTI shed nearly 11 percent in the past week and Brent almost 12 percent.

“Non-OPEC growth year-on-year is grinding to a halt, so some of the effects from low oil prices are starting to appear”, said Amrita Sen, chief oil analyst at consultants Energy Aspects Ltd.in London.

At its meeting on Friday, OPEC members made a decision to continue pumping near-record levels of oil to maintain market share against non-OPEC members like Russian Federation and U.S.in an already oversupplied market.

According to the OPEC report, fall of oil supply to the global market is expected on all the countries of the former Soviet Union (FSU) in 2016.

At the same time, the IEA expects non-OPEC production to decrease by 600,000 bpd in 2016 as high-priced US shale producers continue to get squeezed out of the market from crashing oil prices.

Banks such as Goldman Sachs have said oil could fall to United States dollars 20 if the world runs out of capacity to store unwanted supply. “As companies make further spending cuts in reaction to sub-$50/bbl oil, the impact on supplies – both from non-OPEC and OPEC – will be even more pronounced in the longer term”, it said.

“Early indicators for the fourth quarter of 2015 show growth easing to 1.3 million bpd year-on-year from a third quarter peak of 2.2 million bpd”, it said. In 2016, demand forecasts for Opec crude remains unchanged at 30.8 million barrels a day, an increase of 1.5 million barrels over the current year. The volume of all futures traded was 36 per cent above the 100-day average at 3.05pm in NY.

The crude inventories USA rigs Crude oil fell in Asia on Friday with expectations for any demand rebound thin in the face of significant over supply.

Dealers are also keeping tabs on next week’s Federal Reserve policy meeting, where it is expected to hike interest rates for the first time in nine years. Chevron has lost 23 percent this year while Royal Dutch Shell Plc, Europe’s largest oil producer, is down 35 percent and trading near the lowest since July 2009. Demand for jet fuel rose by 19.1 per cent as more Chinese took to the skies. On Friday, Russian’s deputy finance minister issued a stark warning of $40-$60 oil “for the next seven years”, Reuters reported. So let us slow down before making predictions that the prices of oil will be low in the future, as it will serve OPEC countries in general, whereas the other oil producers have more expensive conventional oil.