Brent Prices Remain Low With No Supply Cut Expected

Brent crude oil remained below $89 on Tuesday as a global supply glut continued to weight on prices. The commodity traded at $88.36 at 9:00 GMT as speculation that OPEC will cut its output faded. 

Despite the fact that most OPEC nations need oil prices to be above $100 in order to balance their budgets, the cartel is not expected to reduce its output in order to boost prices. The group is set to meet at the end of November, and though some members have called for reduced supply, others have said they are open to the possibility of low prices for an extended period.

Both Kuwait and Saudi Arabia have said they are willing to accept prices near $80 per barrel in order to gain market share. The two have said that for the group to compete with the low prices of Russian and US oil, they may have to allow prices to drop rather than cutting output.

Brent found some support from data out of China yesterday which showed that the nation’s commodity imports increased in September. Crude oil imports were up 13 percent from August, and unexpected positive for Brent prices.

However, on Tuesday the International Energy Agency trimmed its global demand forecast, further pressuring crude prices. CNBC reported that the agency reduced its 2014 demand growth by 200,000 barrels per day and took it’s 2015 forecast down 300,000 barrels to 93.5 million barrels per day. The IEA also commented that crude prices could fall further as current supply levels far exceed global demand.