Oil prices fell Tuesday as market expected that global supplies will continue to exceed demand.
The Organization of the Petroleum Exporting Countries (OPEC) last Friday decided to keep crude production pumping at the current level in the already oversupplied market, and for the first time in decades, failed to agree to a production ceiling.
The group currently produced about 31.5 million barrels a day. Traders worried the prolonged supply glut would continue to drag the oil market down. U.S. crude oil production is forecast to decrease through the third quarter of 2016, according to a report released by U.S Energy Information Agency (EIA) Tuesday.
EIA estimated that the total U.S. crude oil production dropped about 60,000 barrels per day (b/d) in November compared with October. Projected U.S. crude oil production averages 9.3 million b/d in 2015 and 8.8 million b/d in 2016.
EIA forecast that Brent crude oil prices will average 53 dollars in 2015 and 56 dollars in 2016. West Texas Intermediate (WTI) crude oil prices is forecast to average 4 dollars lower than the Brent price in 2015 and 5 dollars lower in 2016.
The West Texas Intermediate for January delivery moved down 14 cents to settle at 37.51 dollars a barrel on the New York Mercantile Exchange, while Brent crude for January delivery decreased 47 cents to close at 40.26 dollars a barrel on the London ICE Futures Exchange.