Gaurav Sharma, Oil Analyst with Digital Outlook/Sharecast, joined Nick Batsford on the Tip TV Finance Show to discuss the oversupply in the oil market and the possibility of a supply correction in 2016.
Everybody is entrenched with the problem of over supply
Sharma noted that countries such as Peru, Columbia and Brazil are still producing the same amount of oil as before the oversupply crisis, but he urged that this won’t last. He continued that the non-OPEC producers will cut down their levels of production over the next few months into 2016.
Iran not the culprit for oil supply
Iraq will ass more to the supply pool than Iran over 2016, commented Sharma, who added that in the first we are seeing a bigger uptake in production. Sharma outlined that the pattern of around 1 million extra barrels of oil per day produced will continue. .
OPEC basket trailing
He highlighted that the OPEC basket is trailing both the WTI and Brent benchmarks, so it is not just the oil from Saudi Arabia being discounted, it is all 12 members of the OPEC basket.
