US Crude Oil Extends Congestion Around $44 Despite OPEC Forecasts
- US Crude oil was little moved after OPEC’s monthly oil report
- OPEC downgraded its forecast for non-OPEC production by 72,000 barrels
- The outlook for 2016 global oil demand growth was projected to slow
US Crude oil held firm around the $44 dollar mark during Monday’s trading session. The restrained trading came despite the Organization of the Petroleum Exporting Countries (OPEC) releasing its monthly oil report. The group noted US oil production has shown signs of slowing as prices have fallen. This reflects OPEC’s ongoing strategy of tempering the rate of US shale production by supporting a global supply glut. The report showed a reduction of 100,000 bpd forecasted for US shale oil next year.
Looking forward to 2016, OPEC has predicted higher demand for its crude oil, increasing its forecast up 190,000 bpd from last month, to 30.31 million bpd. Saudi Arabia told OPEC it slowed production to 10.27 million bpd, however, OPEC expects a supply surplus of 1.23 million bpd for 2016 if production continues at the rate seen in August.
OPEC’s outlook for global oil demand in 2016 was downgraded to 1.29 million bpd. The group saw weakness in China and Latin America as factors continuing to contribute to the expected slowdown in global oil demand growth. For non-member countries OPEC sees supply increasing by 160,000 bpd in 2016, a rather dramatic decrease from the growth seen in 2015 of 880,000 bpd.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.