Shale oil production in the USA will drop by 385,000 barrels a day next year as a crude price below $50 a barrel “slams brakes” on years of growth, the agency said in its monthly market report.
OPEC also raised its estimate of the demand for its own crude this year by about 400,000 barrels a day to 29.3 million barrels.
October Brent crude on London’s ICE Futures exchange, which expires Tuesday, saw prices fall $1.77, or 3.7%, to $46.37 a barrel. Total imports of Saudi crude for the week ending September 4 were 1.06 million barrels per day, down 15.2 percent from the same week in 2014.
Macquarie noted that global vehicle sales, which fell 1% in August and 0.8% in July, were dragging on demand.
Benchmark USA prices are now at around $45 this week – down from $100 at this time past year.
Reuters says in a report that the price reduction is just one of the steps taken by Iran to ramp up output and regain market share lost after a series of draconian sanctions that were put into place against the country by the us and the European Union cut its crude oil exports by more than half.
The global Energy Agency said last week that ongoing production cuts would lead to a rebalancing of the oil market by next year.
“Although oil prices have fallen, we hope that with the financial assets that will be unblocked, the public’s purchasing power can increase“, Nobakht said.
USA crude futures were flat at $44.63 a barrel. The emergence of new sources of oil from the US, where producers are tapping shale reserves, has fueled the collapse. Opec and other oil-producing nations would respond to a request by Venezuela that the supplier group meet to try to stabilise crude prices, Qatar’s Energy and Industry Minister Mohammed Al Sada said last week.
Despite this, the outlook for global oil markets remained weak due to strong production clashing with stalling demand, creating a market in which more oil is produced than needed.
“Oil’s price collapse is closing down high-cost production from Eagle Ford in Texas to Russian Federation and the North Sea“, it said. It cut its average price forecast for 2016 to $45 a barrel from $57.
“We continue to see the principal risk to world oil prices being Saudi Arabia’s agenda for greater market share and lower prices to hurt its geopolitical foe, Iran“, Christensen concluded. Opec is pretty much saying that they are not going to change their production.
The number of rigs seeking oil slid to the lowest level in nearly two months, according to Baker Hughes Inc China’s crude processing rose last month as gasoline demand encouraged higher refinery output, data from the National Bureau of Statistics showed yesterday.