CH: Oil prices tank after United States inventories report
Oil prices have sunk after the U.S. government reported a big jump in United States crude-oil inventories, reinforcing worries about the long-running global oversupply. The IEA also forecasts that non-OPEC supply will decline by 600,000 per day in 2016, as USA shale producers struggle to maintain output at lower prices. "In the next 10 years, even if oil demand growth were zero... just to increase production to compensate for the decline of existing fields, we need investment at the level of $650 billion", Mr Birol told a news conference.
Internationally traded Brent crude futures were at $44 a barrel, down six cents.
The slowdown in China has pulled down the entire commodity sector, with products like crude, copper, liquefied natural gas (LNG), coal and iron ore all down between 20 and 30 percent this year, on a re-based basis valued at 100 points on January 1.
Adding more pressure to prices, data on Friday showed the first rise in the US oil rig count in 11 weeks. Oil stockpiles have swollen to a record of nearly 3 billion barrels because of strong production in OPEC and elsewhere, the worldwide Energy Agency said in its monthly market report on Friday.
Brent was off 36 cents, or almost 1 percent, at $43.68 a barrel, its downside limited by the impending expiry of its front month December contract at Friday's settlement.
"The OPEC meeting scheduled for December may shed a few light on how the organisation plans to tackle the global glut, but it remains unlikely that a cut may be implemented this year", noted FXTM research analyst Lukman Otunuga. But the Organization of the Petroleum Exporting Countries said its output could trend higher again next year, with a 560,000-barrels per day (bpd) surplus, if it continued pumping at October's rate of 31.38 million bpd.
Compared to Thursday, the Benchmark Us crude futures dropped twenty eight percent reaching $41.47 per barrel at 0139 GMT.
There were also a few notable oil-price forecasts this week, including the EIA's lowered projection for 2016 average oil prices by $2 per barrel to $56 per barrel.
