Brent Crude Drops Below $44 a Barrel

However, with weaker seasonal demand due to the refinery maintenance season, oil stockpiles in the U.S. continue to grow and are at levels that haven’t been seen at this time of year for at least 80 years, according to the U.S. Energy Information Administration.

The black gold received fresh impetus and rebounded higher on Monday on the back of comments from Saudi Arabia to co-operate with other oil producers to bring price-stability in the markets.

The oil industry awaits the biannual meeting of the cartel that will be held in Vienna on December 4. The other larger producers of oil such as Saudi Arabia, Nigeria, Russia, and Kuwait hope to benefit from the reduction in oil supply.

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“In that case, they would surrender all their efforts, or any success they had achieved so far in the last 12 months and any pain would have been for nothing”, he said. “Rhetoric is one thing, action is something else”.

OPEC ministers are expected to meet on December 4 to assess the producer group’s output policy amid a global supply glut that has pushed down crude prices by 45% in the past year. The situation has not been helped by the strong dollar, which recorded seven-month highs at the start of the week. Angola, another member of the Organization of Petroleum Exporting Countries, also surpassed Russian Federation in shipping crude to the Asian nation. The volume of all futures traded was about 36 per cent below the 100-day average.

Another factor weighing on oil prices is the rising dollar on anticipation that the U.S. Federal Reserve might tighten monetary policy in the next month policy meeting. “This would mean that oil prices should be holding steady this week and should mean that supports of $40 and $43 for WTI and Brent January 2016 should hold”, he said.

In an interview with the BBC Sunday, Goldman Sachs analyst Michele Della Vigna said he saw a “15 per cent probability” that oil could fall to as little as $20 a barrel next year. The European benchmark crude traded at a $2.77 premium to January WTI.

Iran expects to increase its oil output by about 500,000 barrels per day (bpd) after sanctions are lifted in 2016.

January futures for North Sea Brent blend decreased by 0.46% to $44.22 per barrel, while January futures for WTI crude oil were down 1.83% to $41.13 per barrel, according to the report.