Record budget deficit forces Riyadh to look at non-oil revenue raising measures

By FXStreet FXStreet (Mumbai) – Oil fell more than 3 per cent yesterday. Benchmark Brent was close to its 11-year lows as markets worried that there remains a strong possibility that crude prices will further fall in 2016. Global over supply is primarily to be blamed. This over supply is largely the result of OPEC’s decision to pump record volumes with the objective to defend market share and eventually drive out US shale producers. OPEC at its December 6th meeting held in Vienna chose to disregard the supply side concerns and decided to increase its collective output ceiling to 31.5 million barrels per day (bpd) from the previous 30 million.

Brent settled down $1.27 at $36.62 a barrel yesterday, after falling to a session low of $36.52. Brent also stayed below U.S. crude’s WTI futures for a fourth straight day. The United States decision to lift a 40-year ban on U.S. crude exports has helped to reduce Brent’s influence on the WTI futures. WTI finished the session down $1.29 at $36.81, following an intraday low at $36.66.

Official data which showed a 46-year low in oil sales in Japan caused crude futures to slump in Asian trading. The New York session too saw no …read more

Source:: FX Street