Brent falls to lowest level since December 2008

The cartel said it is expecting a sharp fall in crude supply from non-OPEC states in 2016, sticking to the strategy of defending its market share.

“U.S. tight oil production, the main driver of non-OPEC supply growth, has been declining since April”, OPEC said in the report.

While OPEC keeps pumping at a record pace, the International Energy Agency says the global oil surplus will last until late 2016.

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

“It is hard to find anyone who is bullish right now on oil”, said Chris Jarvis, founder of Caprock Risk Management, an oil consultancy in Frederick, Maryland.

The price of oil is falling further after the International Energy Agency forecast a decline in demand.

After a bruising week for commodities, a selection of analysts have told CNBC that the price of oil will see a reversal despite weak fundamentals and a lack of positive sentiment.

Non-OPEC production is set to drop by 600,000 bpd, a dramatic turnaround from the surge of 2.4 mn bpd of production growth seen in 2014.

Late yesterday in Beijing, the People’s Bank of China indicated that it would soon begin to weigh the yuan, or renminbi, against a basket of currencies instead of pegging it to the dollar.

Finally, the below graphic is from the WSJ, making the case that consumer spending has been lumpy in response to lower gasoline prices, with auto and home sales up, but inflation-adjusted spending at retailers sluggish since mid-year.

IEA’s estimates aren’t a big revelation, but makes it harder for oil bulls to claim the market is on the verge of a turnaround, said Todd Garner, managing partner at hedge fund Protec Energy Partners LLC in Boca Raton, Fla.

“That’s a powerful confirmation”, Mr. Garner said.

According to OPEC’s Monthly Oil Market Report published on December 10, November production rose by 230,100 bpd from October; the 31.695 million bpd total is nearly 900,000 bpd more than the anticipated demand for OPEC crude in 2016 (OPEC pegs that demand at 30.8 million bpd).

Traders were also positioning themselves before next Wednesday’s expected interest rate hike, the first in nine years, from the US Federal Reserve.

“A test of the 2009 lows can not be excluded”, he said.

Brent’s session low was $37.36 – barely a dollar above the$36.20 hit during the financial crisis. It was the low in (2008), it was the highs and lows through 2000 to 2004. Brent futures have lost 7.60% in the same period.