Lower Consumption Causes Surplus And Dips Oil Prices
The global supply imbalance is getting worse. So, oil futures prices (WTI) plunged 12.5% this week from $47.90 on Friday, November 3 to $41.96 this morning Wednesday, November 11. The U.S. Energy Information Administration’s (EIA) latest report indicates that the world supply surplus of 590,000 barrels increased per day (bpd) compared to September to 1.58 million bpd.
While there was no change in the supply, the consumption decreased to 520,000 bpd. Weaker consumption suggests weakening demand. Only OPEC estimates global oil demand. Their Monthly Oil Market Report released today shows world oil demand growth of 1.6 million bpd so far in 2015 but decreasing to 1.5 million bpd overall for the year and only 1.25 million bpd for 2016. OPEC data indicates about 1 million barrels of surplus supply relative to demand.
Source : Forbes