Oil prices may fall again as OPEC raises supply

Ahead of its meeting on Friday, the Organisation of Petroleum Exporting Countries (OPEC) is currently fuelling an oversupply of crude oil, despite falling prices.

The oversupply in crude oil is currently being fuelled by Saudi Arabia, the group’s largest exporter, and Iraq, the world’s fastest growing source of ‘oversupply’ in 2015, among others.

OPEC supply rose in November to 31.77 million barrels per day (bpd) from 31.64 million in October, less than a million barrels from the organisation’s record high, a Reuters’ survey has shown.

The oil body has its 168th ordinary meeting set for December 5, where experts expect it to cut supply in order to push up the oil prices for the benefit of producing states.

However, some OPEC delegates have revealed that the body may not change its stance on supply, based on the staunch influence of Saudi Arabia on the current, high output situation.

In November, the OPEC daily basket price dipped to a six-year-low, hitting $38 per barrel.

Following production of US Shale oil, and obvious oversupply in the crude oil market, OPEC was forced to revise production of its crude to 31.57 million barrel per day in August, 2015.

The peg was violated in September when supply increased to 31.68 million, falling in October to 31.64, hundreds of thousand barrels higher than the set benchmark, only to peak in November.

Iran has also threated to increase supply in 2016, with clear indications that it was not willing to work with OPEC on supply control.

This oversupply continues to affect the financing of crude dependent countries across the world.