Oil drops to new 7-year lows
While non-OPEC supply remains stubbornly high this year, the IEA forecasts it will decline by 600,000 barrels per day in 2016, as US shale producers slash investment.
With extra barrels coming from OPEC and no sizeable increase in demand for OPEC crude, the report points to a 860,000-bpd supply surplus next year if the group keeps pumping at November’s rate, up from 560,000 bpd indicated in last month’s report.
“U.S. tight oil production, the main driver of non-OPEC supply growth, has been declining since April”, OPEC said in the report.
On the Intercontinental Exchange (ICE), Brent crude for January delivery wavered between $39.51 and $40.69 a barrel, before closing at $39.75, down 0.34 or 0.88% on the day. The EconoTimes content received through this service is the intellectual property of EconoTimes or its third party suppliers. Everybody is predicting that oil prices will decline to as low as 30 or even 25, but this is pure speculation just to gain more publicity or to be known as the one who forecasted low level of crude oil prices.
In its December oil market report, released on Friday, the Paris-based International Energy Agency (IEA) projected global demand growth in 2016 to slow considerably, widening the gulf in the supply-demand imbalance worldwide.
While Novak did not take part in that OPEC meeting in Vienna, Russia is expected to take part in the next expert-level meeting between OPEC and some non-OPEC producers on global oil markets on Tuesday. Chevron has lost 23 percent this year while Royal Dutch Shell Plc, Europe’s largest oil producer, is down 35 percent and trading near the lowest since July 2009. However, it added that “as inventories continue to swell into 2016, there will still be a lot of oil weighing on the market”.
Brent crude futures were down 29 cents at $39.44 a barrel at 0551 GMT, a touch above a near-seven-year low hit earlier in the session at $39.38 a barrel. Prices are falling for a sixth day, the longest losing streak in nearly nine months, since the Organization of Petroleum Exporting Countries chose not to curb output at its December 4 meeting.
Brent futures are down more than 11 percent this month and, having dipped below $40 per barrel, there are renewed expectations it might test 2008’s low around $36.
LONDON-Oil tumbled to fresh lows Friday, with the US benchmark price slipping below $36 a barrel after a top energy watchdog said low prices are taking a toll on supply but that isn’t yet enough to relieve the global crude glut. Early indicators for the fourth quarter of this year show growth easing to 1.3 million barrels a day, from a peak of 2.2 million barrels in the previous quarter.
Prospects for a white Christmas are dimming as warm weather sweeps the U.S. East, and that means slumping prices for natural gas.