OPEC forecasts falling oil supplies

Organisation of the Petroleum Exporting Countries (OPEC) said its oil output fell in October and forecast supply from rival producers next year would decline for the first time since 2007 as low prices prompt investment cuts, reducing a global supply glut.

 In a monthly report, Opec said it pumped 31.38 million barrels per day (bpd) last month, down 256,000 bpd from September. If realised, the forecast of a decline in supply outside Opec would be a further indication the group’s strategy is working.

Opec last year abandoned a long-standing policy of propping up prices and instead raised output, seeking to recover market share taken by higher-cost rival production. Oil is trading at just under $46 a barrel, more than 50 per cent below its price in June 2014. “The recent decline in oil prices has demand,” OPEC said in the report. “It has also provided a challenging market environment for some higher-cost crude oil production, which has already shown a slowdown.”