Oil prices were little changed on Monday near multi-month lows, dragged down by worries about oversupply as OPEC saw record output last month and as the US rig count rose again.
London Brent crude for January delivery was trading up 4 cents at $44.79 a barrel by 0630 GMT, after settling down $1.09 on Friday. The benchmark on Friday hit its lowest since August 11 at $44.19.
The dollar rose to a nine-month high against other currencies on Monday, pressuring oil prices.
“Overall the market is seen heading lower because of a strong dollar,”
-said Kaname Gokon at brokerage Okato Shoji in Tokyo.
It seems as the meeting to allegedly work out the details of the proposed cut in production by OPEC approaches, the amount of oil flowing from the cartel continues to rise, with the latest data showing output for October has climbed by another 240,000 barrels per day to a total of 33.64 barrels per day. That’s about 1 million barrels per day above the agreement floated in September.
Most of the additional supply has come from Iraq, Libya and Nigeria, all of which seek exemptions from adhering to any production cut deal that may be made.
While news of this has gone on, and OPEC has asserted in the past few months and longer, that oil was likely to rebalance, U.S. shale producers have ramped up production by completing more wells and adding more rigs.
In contrast, the IEA predicted a 500,000-barrel increase in oil production outside the cartel for 2017. OPEC’s estimates put non-OPEC production next year at an average daily of 56.43 million barrels. This, added to OPEC’s October rate of production, would give the world almost 91 million barrels of oil per day.