Prices on oilfutures dropped sharply on Monday as data showed that OPEC’s output rose by 109,000 barrels a day in September to 31.57 million barrels a day, the most since 2012, according to its monthly market report.
On the New York Mercantile Exchange, light, sweet crude oil futures for November delivery slumped $2.53, or 5.1%, to end at $47.10 a barrel. November Brent crude on London’s ICE Futures exchange dropped $2.79, or 5.3%, to close the day at $49.86 a barrel.
Oil prices have suffered a major decline due to oversupply. Moreover, major oil producers’ such as OPEC, Russia are unwilling to cut production to protect market share that bring prices even lower.
However, recent talk of possible collaboration between members and nonmembers of OPEC has injected some optimism into the market.
Market participants are closely watching to see if Saudi Arabia and Russia, the biggest non-OPEC producer, will meet later this month to discuss the oil market.
Meanwhile, Abdalla Salem El-Badri, said at a conference in Kuwait City on Monday that the market may be “balanced” in 2016 as demand grows and non-OPEC supply contracts.
“In terms of non-OPEC supply, the impact of lower oil prices on production has resulted in the supply growth forecast being downwardly revised to 720,000 barrels a day in 2015, some 600,000 barrels a day less than the initial forecast and well below the previous year,” OPEC said in the report.
With respect to technical conjecture of the Oil market according to Tom Finlon, Jupiter, Florida-based director of Energy Analytics Group LLC, The market is below some important long-term averages and failed to break through. WTI came within 4 cents of breaching the 200-day moving average Oct. 9 and failed again Monday, a signal to sell. The 200-day moving average stands at $50.93.