Crude slumped about 38 percent in the last year, with global benchmark Brent crude headed for its lowest annual average in a decade after reaching a six-year low of $42.23 on Aug. 24. Brent fell 1.9 percent to $43 a barrel Friday, while West Texas Intermediate crude dropped 2.7 percent to $39.97.
"We will be looking at a teeter-totter market," said Daniel Yergin, the Pulitzer Prize-winning oil historian and vice chairman of industry consultants IHS Inc. "U.S. production is going down while Iranian production should be increasing."
Failure to reduce the global oversupply could push oil prices $20 lower next year, Venezuelan Oil Minister Eulogio Del Pino warned before the OPEC meeting.
After Friday’s OPEC decision “everyone does whatever they want,” said Iranian Oil Minister Bijan Namdar Zanganeh. “I think there will be a decision about how to act on the market in the second quarter of 2016,” after Iran has restored some of its oil shipments, he said.
Iran won’t accept any production curbs until it restores about 1 million barrels a day of output after the removal of international sanctions next year over its nuclear program, he said. Saudi Arabia said it didn’t feel obliged to cut production, which is running close to a record.
One place where production is projected to fall is the U.S. where oil drillers have idled more than half the country’s rigs in the past year. The number of active oil rigs in the nation fell to 545, the least in five years, Baker Hughes Inc. said on its website Friday.
OPEC’s policy is squeezing incomes for its members, whose combined annual revenue could fall to $550 billion from an average of more than $1 trillion in the past five years, the International Energy Agency said Nov. 10.
Record output this year from Saudi Arabia, Russia and Iraq has boosted global oil stockpiles to an all-time high, the IEA said on Nov. 13. The market is oversupplied by as much as 2 million barrels a day, Zanganeh said. (Bloomberg)