OPEC continues to produce significantly in excess of demand

Oil prices are showing signs of weakness as the new week of trading begins. Brent has dropped to $49 per barrel and WTI to $46 per barrel, the still plentiful oil supply weighing on their prices. According to a Reuters survey, OPEC oil production in October declined by 120,000 to 31.64 million barrels per day, yet the September figure was upwardly revised by 80,000 barrels per day. 

OPEC is thus continuing to produce well in excess of demand, which the IEA puts at 30.5 million barrels per day in the fourth quarter. Although Saudi Arabia scaled output down by 150,000 barrels per day in October in response to lower domestic demand, it is still producing more than 10 million barrels per day, notes Commerzbank.  

Iraq likewise produced 100,000 barrels per day less crude oil - Reuters cites weather-related delays to shipment from the country's southern export terminals as the reason for this reduction.

Higher Iraqi production can presumably be expected again this month. Russia, the largest non-OPEC producer, stepped up its oil production in October to a record 10.8 million barrels per day, and as such is likewise contributing to the oversupply.