Oil Set for 10% Decline

Oil Set for 10% DeclineOil Set for 10% Decline

Oil prices on Monday were on course to end November some 10% lower as a global supply glut showed no sign of easing.

Brent Crude, the global oil benchmark, was down 6 cents at $44.80 a barrel, on track for a 10% fall for the month, Reuters reported.

US crude futures were trading 7 cents lower at $41.64 per barrel and looked likely to reach the same monthly milestone.

Oil is set to average below $50 for a fourth month, the longest stretch since the global financial crisis, as a record supply glut showed no signs of ending amid a producers’ fight for market share.

A selloff in Chinese stocks dragged on Asian markets on Monday and European markets also opened lower, paving the way for a bearish start to the week.

The week's highlight is an OPEC policy meeting on Dec. 4 about whether to adjust its production strategy in light of weak oil prices.

Most analysts do not expect OPEC to cut production, but they are mindful that Saudi Arabia could be inching toward the idea of working on price support measures with other oil producers.

OPEC and Russia could make "some sort of coordinated attempt to reduce production", said Jonathan Barratt, chief investment officer at Sydney's Ayers Alliance.

"The glut continues, but I do feel that it could be reversed quite quickly given the change in interest rates in the United States, which would indicate more demand."

The OPEC meeting should also include discussions about new supply from Iran, according to analysts at Morgan Stanley.

Iran, once the second-largest producer in OPEC after Saudi Arabia, hopes to raise its crude exports by as much as 1 million barrels per day within months, once sanctions aimed at its nuclear program are eased.