NYMEX crude falls in Asia, weekend OPEC comments brushed off

Investing.com - Investors sold crude oil futures early Monday in Asia with an over supplied market the main driver.

On the New York Mercantile Exchange, crude oil for delivery in January tumbled to $56.77 a barrel, down 1.66%. It ended Friday at $57.81 a barrel, after hitting a daily low of $57.40, the weakest level since May 2009.

The head of OPEC said on Sunday the group had no target price for oil, signaling no change to a policy to maintain production levels which has contributed to sharp falls in the price of crude, unnerving global markets.

Speaking at an event in Dubai, Abdullah al-Badri said the oil price, which dropped to a succession of five-year lows in recent days, had fallen further than market fundamentals should have dictated.

Last week, oil prices continued to tumble on Friday, to hit the lowest level since 2009, as investors piled on to their short positions in anticipation of lower prices into the new year amid concerns over a growing supply glut.

On the ICE Futures Exchange in London, Brent for January delivery hit a session low of $61.35 a barrel, a level not seen since July 2009, before settling at $61.85, down $2.21, or 3.48%.

On the week, the January Brent contract plunged $7.22, or 10.45%, the third consecutive weekly decline.

The International Energy Agency, the Organization of the Petroleum Exporting Countries and the U.S. Energy Information Administration all cut their estimates for oil-demand growth during the week, fuelling concerns over a slowdown in global demand.

The IEA cut its 2015 global oil demand growth forecast by 230,000 barrels per day to 0.9 million barrel per day on Friday.

"Barring a disorderly production response, it may well take some time for supply and demand to respond to the price rout," the IEA said in its report.

Meanwhile, OPEC's monthly report released Wednesday forecast that global demand for the group's oil will drop to 28.9 million barrels a day next year, the lowest in 12 years, and down from 29.4 million barrels a day in 2014.

Oil's sell-off intensified after OPEC decided to maintain its output target at 30 million barrels a day on November 27, disappointing hopes the oil cartel would lower production to support the market, as a surplus develops amid the shale boom in the U.S., which is pumping at the fastest pace in more than 30 years.

Saudi Arabia's oil minister Ali al-Naimi reiterated Wednesday that the kingdom has no plans to curb output, adding to bearish sentiment.

Kuwait lowered official selling prices for its crude in January, following similar moves from Saudi Arabia and Iraq, indicating that OPEC exporters are stepping up a battle for market share with cheaper U.S. shale oil.

In the week ahead, investors will be awaiting the outcome of Wednesday’s Federal Reserve policy meeting for further clarification on when interest rates might start to rise.