Competition will cut their oil production in 2016 – OPEC

Brent crude futures were down 29 cents at US$39.44 (RM168.97) a barrel at 0551 GMT (1.51pm MYT), a touch above a near-seven-year low hit earlier in the session at US$39.38 a barrel.

Futures of Brent and US crude’s West Texas Intermediate (WTI) were up more than $1 a barrel in an immediate reaction to the data, before turning negative later as the market’s attention turned to the bearish distillate numbers. More supply will test the sustainability of many oil producers, and we could see oil prices collapse.

OPEC forecast on Thursday that oil supply from non-member countries would fall more sharply next year, a development that would suggest its strategy of defending market share is working.

Crude-oil production has remained robust despite the large drop in prices in the a year ago, as U.S. producers continue to cut costs and OPEC members keep producing at full tilt.

The uncertainty helped push crude oil prices lower in early Thursday trading.

Iraqi production grew by over 246,500 barrels per day to more than 4.3 billion daily in November, according to source citing the new report, which did not announce a reason for the increase.

The Organization of the Petroleum Exporting Countries, which pumps out around a third of world’s crude, effectively abandoned its production target of 30 million barrels per day. For 2016 OPEC expects an increase of 1.25 million barrels per day, unchanged from last month’s forecast, to 94.13 million.

One hundred and eighty-five years after the birth of American poet Emily Dickinson, and OPEC has been waxing lyrical today in its latest monthly oil report.

“Focus now turns to the Baker Hughes drill rig count this evening”, he said, referring to an inventory of active oil drilling rigs in the United States indicating production activity. Iraq, though, increased production by 248, 000 barrels per day in November, representing a spike of 247.5% from its level in October.

Brent crude was on track for its lowest weekly close since 2008 on Friday as the International Energy Agency (IEA) warned global oil oversupply could worsen in the new year.

“While crude oil price is now hovering at US$40 per barrel, the above projection was for the whole year’s average of 2016 and the price could rebound in the future”, he said.

For the first time in decades, OPEC oil ministers dropped any reference to the group’s output ceiling, highlighting disagreement among members about how to accommodate Iranian barrels once Western sanctions are lifted.