Investing.com - Oil prices crashed to fresh seven-year lows on Friday, after a bearish report from the International Energy Agency projected that a global supply glut could worsen next year.
In its December oil market report released Friday, the Paris-based IEA projected global demand growth in 2016 to slow considerably, widening the gulf in the supply-demand imbalance worldwide. Next year, the IEA anticipates that global demand will grow by 1.2 million barrels per day, down from a previous estimate of 1.8 million.
“As inventories continue to swell into 2016, there will still be a lot of oil weighing on the market,” the IEA said.
The bearish estimates came one day after the Organization of the Petroleum Exporting Countries said it pumped the most crude in more than three years last month, adding to concerns over a glut in global supplies.
In its own monthly oil market report published Thursday, OPEC said crude production rose by 230,100 barrels a day in November to 31.695 million, the most since April 2012, as the cartel pressed on with a strategy to protect market share and pressure competing producers.
Oil futures are down approximately 14% since OPEC failed to agree on output targets earlier this month. As a result, crude prices are expected to remain stubbornly low amid a glut of oversupply on global energy markets.
On the ICE Futures Exchange in London, Brent oil for January delivery sank $1.80, or 4.53%, on Friday to close the week at $37.93 a barrel. It earlier fell to $37.36, a level not seen since the depths of the global financial crisis in December 2008.
On the week, London-traded Brent futures dropped $5.07, or 11.79%, its worst weekly loss of the year. Brent oil prices are on track to post an annual decline of 33% in 2015, as oversupply concerns dominated market sentiment for most of the year.
Elsewhere, on the New York Mercantile Exchange, crude oil for delivery in January tumbled $1.14, or 3.1%, to close the week at $35.62 a barrel. It earlier touched $35.16, the lowest since February 2009.
For the week, New York-traded oil futures plunged $4.35, or 10.88%, the biggest weekly decline since December 2014. U.S. oil futures are down 33% so far this year amid worries over ample domestic supplies.
Global crude production is outpacing demand following a boom in U.S. shale oil and after a decision by OPEC last year not to cut production in order to defend market share.
In the week ahead, investors will be focusing their attention on Wednesday’s outcome of the final Fed meeting of 2015. U.S. economic reports on inflation, manufacturing activity and industrial production will also be closely watched.
Wednesday’s survey data on euro zone private sector growth will be scrutinized by market watchers for signs of a recovery in the region.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Monday and Friday as there is no relevant data on these days.
Tuesday, December 15
In the euro zone, the ZEW Institute is to report on German economic sentiment.
The U.K. is to report on consumer price inflation.
The U.S. is to release reports on inflation and manufacturing activity in the New York region. Later in the day, the American Petroleum Institute, an industry group, is to publish its weekly report on U.S. oil supplies.
Wednesday, December 16
The euro zone is to release survey data on manufacturing and service sector activity. Germany and France are also to release individual reports.
The U.K. is to report on consumer price inflation.
The U.S. is to release data on building permits, housing starts, industrial production and crude oil inventories. Later Wednesday, the Federal Reserve is to announce its latest interest rate decision and hold a post-policy meeting press conference.
Thursday, December 17
In the euro zone, the Ifo Institute is to report on German business climate.
The U.K. is to release data on retail sales.
The U.S. is to produce reports on manufacturing activity in Philadelphia and initial jobless claims.