RD: Oil stays below $40 after OPEC decides against output cut
Oil prices have been on the defensive since Friday, when the Organization of the Petroleum Exporting Countries took no action on production to address a supply glut that has depressed prices for more than a year.
WTI Crude Oil is expected to see 1st support at 36.95, a break there may push it to next support at 36.09.
Goldman Sachs analyst Damien Courvalin projected OPEC's production in 2016 will remain modestly above the current level, at 31.8 million barrels per day, while that of Iraq will be slightly below its current level and Iran will see a modest growth in output.
Following a 6 hour meeting Friday, OPEC announced that it is leaving its output ceiling unchanged at 30-M BPD.
The euro rate climbs to 76.14 rubles during the trading session on the Moscow Exchange for the first time since September 15.
Because of ongoing oversupply, prices will likely fall further, with the chief executive of French oil major Total saying he did not anticipate an oil price recovery because of supply outstripping demand.
Traders anxious the prolonged supply glut would continue to drag the oil market down. If OPEC failed to curb this surplus by cutting production, it would result in a "catastrophe" for the market and potentially another $20 drop in prices, he said.
OPEC said that in light of its projections and "emphasizing its commitment to ensuring a long-term stable and balanced oil market for both producers and consumers, the conference agreed that member countries should continue to closely monitor developments in the coming months".
U.S. benchmark West Texas Intermediate for delivery in January was trading 58 cents higher at Dollars 38.09 and Brent crude for January was up 48 cents at USD 40.74 at around 0250 GMT as dealers hunted for bargains after prices fell to their lowest in almost seven years this week.
The price of oil has not made much of an impact on the world's economy as the USA is only starting to recover from the recession while a number of other economies are now experiencing a slowdown, including China.
An interest rate increase typically boosts the dollar, which would make dollar-priced oil more expensive to holders of weaker currencies.
