On Monday, oil prices fell by more than 2% due to concerns of China’s economic growth. China, the world’s largest energy consumer, grew at the slowest pace in six years in the third quarter making it increasingly likely for Beijing to cut the interest rates to stoke activity.
This data, which was released earlier today, ”suggests that the main global oil demand growth engine of the world is not going to be the solution to the oversupplied oil market… The solution is going to have to come from a significant cut in production.” according to the Energy Management Institute, Dominick Chirichella. However the oil minister of Iran has said that he expects Iran to boost oil production in the next two months by up to 500,000 barrels.
According to analysts, member countries of OPEC aren’t expected to cut the production of oil and the idea of an output cut “will remain just that, an idea, until Saudi Arabia expresses any interest in defending prices rather than market share,” according to the co-editor of The 7:00’s Report, Tyler Richey.
Despite production from OPEC countries reaching 30 million barrels, there are indications of slowing down in the U.S., wit US crude oil rigs falling for the seventh consecutive week to 595 for the week ending October 16, 2015.