NYMEX oil futures break below $40/bbl ahead of OPEC meeting
On December 4, the Organization of Petroleum Exporting Countries (OPEC) will meet in Vienna to discuss current situation in oil market. Some OPEC countries will push Saudi Arabia to abandon their current policy and to work to lift prices, asserting that Iran’s higher crude oil production following the easing of sanctions will exert further downward pressure on oil prices. Saudi cabinet stated that they are ready to cooperate with OPEC and non-OPEC countries in order to stabilize oil markets; however some market players reported that Saudi Arabia is expected reject calls from fellow OPEC members to cut output at the meeting in order to defend its market share. Previously, Saudi Arabia reported that they will agree to cut output if non-OPEC counties also reduce production.
Global oil prices have been in a softening note since mid-2014 because of global glut and weak demand. In November, the Organization of Petroleum Exporting Countries (OPEC) reported that the global oil inventory surplus was at its highest level in at least a decade. According to OPEC, the oil stock surplus in developed countries was 210 million barrels above the five-year average in November. The last time that oil stockpiles exceeded 150 million barrels was in the first quarter of 2009.
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