Oil continues to fall

West Texas Intermediate crude oil futures for delivery in December were trading 0.6% lower at $43.62 per barrel during Wednesday’s pre-market trading session while Brent oil futures for delivery in the same month were down by 0.2% at $47.20 per barrel. That would be the largest US monthly import of Iraqi oil since mid-2012.

But he said the growth in demand this year, which the IEA says should reach 95.5 million barrels a day this quarter, was one of the few positives in the report “among the plethora of darkness and negative overtones that’s sending oil down to $40”. Weekly USA data showed stocks rose by 4.2 million barrels, four times above market expectations.

Crude prices have fallen more than 45% over the previous year since OPEC roiled global markets with its decision to leave its production ceiling above 30 million barrels per day in an effort to maintain market share.

Today’s inventory report from US Energy Information Administration (EIA), to be released at 16:00 GMT.

Gains were meanwhile capped after a huge jump in U.S. crude inventories reinforced projections that a supply glut will persist well into next year.

The FTSE 100 was down 52 points at 6,125 in lunchtime trading after closing down 1.9% on Thursday, while Frankfurt’s Dax fell 0.7% and the Cac in Paris shed 0.8%.

The IEA and EIA reports taken together lead me to two unavoidable and disturbing conclusions: over-production continues and a weak global economy is an obstacle to oil-demand growth.

Iraq is OPEC’s No 2 crude producer.

The group said it pumped 31.38 million barrels per day (bpd) last month, down 256,000 bpd from September, in the first decline since March.

And although demand has risen to a five-year high, it’s expected to ease in 2016, as the factors that boosted it fade. The world’s surplus is at the highest level in at least a decade, according to OPEC.

Overall, the report shows a stronger outlook for oil markets next year because of the cut to non-OPEC supply and increase in the demand forecast, according to DNB, RBC Capital Markets and Sanford C. Bernstein & Co.

The 12-member Organization of the Petroleum Exporting Countries is scheduled to meet on December 4 in Vienna.