The CHART OF THE DAY shows how the group supplying 40 percent of the world’s oil has kept pumping at or above its own production limit of 30 million barrels a day even as output in the U.S. climbs to the highest in decades.
Crude collapsed into a bear market this year as the U.S. boom contributed to a global surplus that Venezuela estimates at 2 million barrels a day, more than the production of five OPEC members. The Organization of Petroleum Exporting Countries, which said Nov. 27 it is taking no action to reduce supply, has exceeded its target in all but four of the 34 months since it took effect at the
start of 2012, according to data compiled by Bloomberg.
“At $60 you start to price out a lot of critical mass production around the world,” said Marina Petroleka, an analyst at Business Monitor International, a unit of Fitch Group. “U.S. shale, deep water in the Gulf of Mexico is affected. It doesn’t price out a lot of Middle East OPEC supply.”
Brent crude, the global benchmark, slumped as low as $69.78 a barrel yesterday, the lowest since May 2010. West Texas Intermediate fell to the lowest since 2009.
The price floor is now at about $60 a barrel or even less, according to firms including Deutsche Bank AG, BNP Paribas SA and Petromatrix GmbH.
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