Oil steady amid over supply

According to the latest price updates, released on OPEC website, the Cartel’s basket oil price decreased by more that $3 on Dec.9, compared to December 3 when OPEC members start 186-th Ordinary Meeting.

Brent futures were up 12 cents $40.23 per barrel at 1210 GMT, having traded as high as $40.70.

The report is OPEC’s first since it abandoned its production target of 30 million barrels a day at its meeting last week and doubled down on its decision past year to pump aggressively in the face of falling oil prices.

“As companies make further spending cuts in reaction to sub-$50/bbl oil, the impact on supplies – both from non-OPEC and OPEC – will be even more pronounced in the longer term”, it said.

Oil prices hit their lowest levels since the height of the Great Recession on Friday following a pessimistic outlook from the International Energy Agency.

Oil has lost 39 percent in the past year as OPEC maintains output to defend market share against higher-cost producers amid a global glut.

THURSDAY: As per organization’s monthly report, in 2016, Non-OPEC supply is likely to experience a drop over by approx. The group’s production rose to a three-year high in November, it said in a report yesterday, as surging Iraqi volumes more than offset a pullback by Saudi Arabia.

The IEA predicts that will slip back to 1.2 million barrels a day next year.

West Texas Intermediate (WTI) U.S. crude futures were down 11 cents at US$37.05 per barrel, erasing early gains.

“U.S. tight oil production, the main driver of non-OPEC supply growth, has been declining since April”, OPEC said in the report. Saudi Arabian production fell by 0.25 MMbpd to 10.1 MMbpd in November 2015.

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.

Hewson said that in thin liquidity up to year-end there is a good chance Brent will fall below its low since 2008 at around $38 per barrel. The group pumped about 900,000 barrels a day more than it anticipates will be needed in 2016.