Crude oil being sold again following the monthly report from the International Energy Agency in which they saw oil demand growth this year rising at the slowest pace since 2009. Following four consecutive months of downgrades they now see 2014 demand grow by just 650,000 barrels per day followed by 1.1 mio bpd next year. At current production levels supply growth will outstrip demand growth and this is adding to the current negative sentiment in the market.
In September the agency saw OPEC production running at 30.66 mbpd and they only see a need for 29.3 mbpd in 2015. This discrepancy combined with non-OPEC rise in production of 1.3 mbpd in 2015 will leave the market oversupplied unless we see a dramatic pick-up in demand or alternatively a sharp reduction in output.
The IEA also said that the US shale industry was not feeling much pain from current low prices as 98% had break-even prices below 80 dollars per barrel and 82% below 60 dollars per barrel.