Low oil prices not sustainable because they pose "a risk" to supply

The phase of high price volatility and falling prices continued on the oil market yesterday, the Brent price in particular shedding 3.7% and dropping below $47 per barrel. 

Alongside the disappointing economic data from China, OPEC's monthly report also contributed to the negative sentiment on the oil market. In contrast to the IEA, OPEC expects production outside the cartel to increase next year, albeit by only 160,000 barrels per day. 

The decline could actually exceed the 500,000 barrels per day estimated by the IEA if prices do not recover in the medium term. The IEA itself estimates that an oil price of $45 per barrel would pose "a risk" to production of 930,000 barrels per day and that a price of $30 per barrel would jeopardize production of around 1.9 million barrels per day. 

"The current prices are therefore veiwed as non-sustainable and expect them to rise. That said, excessive weight should not be attributed to any Brent "price rise" tomorrow as this would doubtless be due to the contract rollover", says Commerzbank.