Crude oil futures

23 Dec 2015 | Author: | No comments yet »

Brent crude oil prices steady after yesterday’s sell-off.

Crude prices are set to rise from current “very low” levels that are hurting producers, Iraq’s Oil Minister Adel Abdul Mahdi said after a meeting of Arab petroleum-exporting nations.OPEC asserts it will continue to produce more than 30 million barrels of oil per day, 2 million barrels above demand, which is causing on oversupply of oil, according to CNBC.

Abdul Mahdi, whose country is the second-biggest producer in OPEC, didn’t forecast when prices would rebound from an almost seven-year low for Brent, the benchmark for more than half of the world’s oil. Francisco Blanch, head of Commodities Research at Merrill Lynch, said Tuesday that a strong USA dollar and restrained global growth could create downward near-term pressures on commodity prices. Qatar’s Energy Minister Mohammed Al Sada told reporters before the meeting in Cairo there was no need to be pessimistic about prices. “There is no doubt that oil prices will rebound,” Abdul Mahdi told reporters after the meeting of the Organization of Arab Petroleum Exporting Countries. “This current level is too low, and it’s affecting oil producers. If the IEA’s prediction is correct – that of near supply/demand balance next year as shown in the chart above – the equilibrium price of Brent oil would remain at around US$40 a barrel (US$40/barrel now times 0% appreciation next year). I think economic factors and fundamentals are still strong.” A global oversupply of crude has triggered the worst slump in the energy business since the 2008 world financial crisis.

Oil prices have fallen by more than 50 percent in a little over a year from levels of well over $100 a barrel, provoked by the slowdown in China and other emerging market economies and the end of sanctions against Iran. OAPEC was established in 1968 to foster the development of the petroleum industry in member states as part of an economic integration plan among Arab countries.

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