Oil prices close 2015 in slump
NEW YORK, December 31, 2015 – Oil prices remained down in the final trading session of the year after American crude inventories rose by record levels last week.
US Energy Information Administration announced the inventory build ais 2.5 million barrels. West Texas Intermediate traded around USD 36.70 per barrel in early Asian trade and Brent opened at USD 36.60 per barrel, holding onto 3% losses from yesterday.
Goldman Sachs says prices would have to drop as low as USD 20 per barrel for the market to rebalance. American bank Morgan Stanley also predicts growing global supplies and a slowdown in demand, saying a rebalancing in 2016 “continues to suffer serious setbacks.”
Global crude production exceeds demand by 500,0000 to 2 million bpd, driving a glut that puts downward pressures on prices. OPEC decided in an early December meeting that it would not cut production.