NEW YORK, Dec. 12 (UPI) -- A Friday decision by the International Energy Agency to trim its oil demand forecast added insult to injury, pushing oil price indices to record lows.
The IEA said in its market report for December the outlook ahead was weaker than previously expected. The outlook for 2015 demand growth was trimmed by 230,000 barrels per day to just under 1 million bpd because of lower expectations about the Russian economy and other oil-exporting countries impacted by the bear market for crude oil. That word sent oil prices reeling in a market already battered by low demand expectations outlined in the December market report from the Organization of Petroleum Exporting Countries.
Brent, the global benchmark, shed more than $1.20 per barrel for the January contract to trade at $62.46 early Friday. West Texas Intermediate, the U.S. index, passed a new threshold low to trade down $1.30 to near $58.50 for January delivery.
Oil prices are at a point where producers may find it difficult to make a profit. Several major oil companies have cut back on their spending forecasts because of what are considered exceptionally difficult market conditions.
IEA said in its Friday report global oil production was off more than 300,000 bpd in November to 94.1 million bpd because of lower OPEC supplies.
For U.S. shale production, the U.S. Energy Information Administration said there was still some momentum. EIA said next year's drilling activity is expected to decline.
"However, projected oil prices remain high enough to support development drilling activity in the Bakken, Eagle Ford, Niobrara, and Permian Basin, which contribute the majority of U.S. oil production growth," it said in a Friday brief.
