Oil prices reduce as OPEC shows an increase in production
On Thursday, the International Energy Agency reported that the members of the Organization of the Petroleum Exporting Countries (OPEC) pumped 33.83 million barrels per day in October. This is one of the record highs, which certainly indicates an increase in production. This however reduces any expectations on the increase in the demand.
The global benchmark Brent decreased by 52 cents and settled at $45.84 per barrel on the ICE Futures Europe. The OPEC group members are scheduled to meet the end of November to discuss the necessity of output cut to stabilize oil prices all over the globe. The market is now affected by the excess supply and it means that the excess supply issue will continue to affect the market next year.
In order to maintain the oil market, the OPEC members will agree upon limiting the production to a maximum of 32.5 million to 33 million per day hereafter. However, traders have shown interest in selling oil because the output rose even with a promise of reduced production. The bearish traders believe that key producers continue to reach peak capacity and it can be impossible to enforce production quotas for individual members. The reduction in oil prices is also intensified as the president elect has talked about plans to remove restrictions on tapping the energy reserves. The oil output from the US has also increased to 8.84 million barrels a day in this year. It is also expected that the output will stay at 8.73 barrels per day in the upcoming year.
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