Oil Nose-Dives 62% In 2 Years, Worst On Record

Analysts estimate global crude production exceeds demand by anywhere between half a million and two million barrels daily.

NEW YORK-Oil prices capped a second year as one of the worst-performing commodities, as a global glut of crude continued to weigh on the market.

In the week ending Dec 18, U.S. crude production added 3,000 to 9.179 million barrels a day, said U.S. Energy Information Agency in its weekly report.

United States benchmark West Texas Intermediate for delivery in February was down 68 cents at $37.19 and Brent crude for the same month was trading 41 cents lower at $37.38 a barrel at around 0620 GMT.

But weather data in Thomson Reuters Eikon shows that average continental European temperatures are expected to drop from around 5 degrees Celsius now toward and slightly below the seasonal norm of 2.4 degrees by January 3 before rising to as high as 6-8 degrees by January 7.

A Kuwaiti stock trader monitors the stock market activity at the Kuwait Stock Exchange (KSE) yesterday on the last trading day of 2015.

Pointing to low production costs, Iran’s director for OPEC affairs said the economy will grow with exports even in a weakened oil market climate.

Brent futures for the next month delivery were 47 cents lower or by 1.24 percent and were trailing $37.32 per barrel.

Russia’s oil output is poised to reach a post-Soviet record of 10.86 million barrels a day this week, according to Energy Ministry data. While cheaper fuel is a boost to consumer spending power in much of the developed world, it is also a disinflationary force that reinforces bets on loose monetary policy in Europe, Japan and China, even as the Federal Reserve proceeds with glacial tightening. USA oil futures declined greatly on the news, falling 3.35% on Wednesday. “U.S. crude oil exports are likely to help reduce congestion concerns in the U.S.”, ING bank said.

“In all the years I have been doing this, I have never seen builds in the last week of December”, said Tariq Zahir, crude futures trader at Tyche Capital Advisors in Long Island, New York.

Meanwhile, oil prices cut losses on Thursday but ended 2015 sharply lower as the commodity suffered under global oversupply and a slowdown in the Chinese economy. US supplies rose 102 million barrels over the year, the biggest jump since at least 1920 in government data.

Marathon Oil Corporation (MRO) has 677.26M outstanding shares, at current price of $12.38 each.

The market is also fearful of surging oil supplies from Iran next year, once sanctions are lifted.

WTI rose 44 cents to $37.04 a barrel.

Russian Federation and OPEC are so far showing few signs of reining in production, leading traders to establish record high active short positions in the market that would profit from further crude price falls.