Oil prices eased even further below $50 a barrel on concerns that oversupply will continue into 2016 and sluggish demand.
Brent crude dropped to $49.16 a barrel, down 8 cents. U.S. crude inched up to $46.69, up 3 cents.Analysts expect oil prices to stay low because of oversupply.
The International Energy Agency forecasted on Tuesday that there is potential for a supply increase from Iran and slowed demand growth. Iran’s increased supply would counter the slowed output from non-OPEC countries and the United States to keep the market oversupplied.
In 2014, OPEC dropped its policy of cutting output to support prices. Instead, the organization decided to protectmarket share against high-cost producers, like the United States.
The Energy Information Administration in the United States forecasts that shale production in the U.S. will drop to historic lows in November.
The latest weekly supply report from the U.S. suggests that the glut will not be ending anytime soon. Analysts are expecting the reports from the EIA and API to show crude stocks increasing by 2.9 million barrels.
The API will release its data on Wednesday, while the EIA will release its data on Thursday.
OPEC has no plans to cut production to support prices, but Venezuela is calling for the group to control output and floor prices at $70.