Oil: highest output since 2012 – ANZ

By FXStreet FXStreet (Guatemala) – Analysts at ANZ noted there was no let-up for oil prices overnight following headlines that OPEC production in November was 31.7Mb/d, the highest output level since April 2012.

Key Quotes:

“In November was 31.7Mb/d, the highest output level since April 2012. The strategy is simple: protect market share and squeeze out competing producers. The group is reported to be pumping 900,000 barrels a day more than it anticipates will be needed next year, so low-to-lower prices will be around for a while.

Traditionally this has been a boon to global consumers and global growth, although this time around the positive effect faces a number of real-time challenges.

First, the commodity was heavily ‘financialised’ as an asset class when prices were high, so low prices will force a shakeout and job losses. Second, consumers are behaving differently now. An extra dollar in the pocket is more likely to be saved than spent.

And an array of other factors are in the mix, such as a tepid global recovery, softening demand in Asia, structural forces (such as legacies from the crisis), alternate energy sources, and the prospect of a start to policy normalisation in the US delaying – and even masking …read more

Source:: FX Street