Oil prices hit new record high as China boosts production to cope with glut
Oil prices reached a new record low on Monday as China boosted production of its crude oil exports to cope the global glut.
China is also ramping up production to meet the demand it saw as a result of a glut of oil in the global market.
The global market has hit a record low of about $50 per barrel, with crude inventories in the United States, Europe and the Middle East having all reached their capacity levels.
With supplies from the Middle Eastern country reaching a record high, China is ramping-up production to compensate.
Chinese Oil Minister Wang Yi told a news conference on Monday that the country’s domestic consumption has reached an all-time high.
“The demand for oil is more than 10 times the domestic production, and the demand for energy is now almost double,” Wang said.
“So, we have reached a historic level of energy consumption in China.”
But despite the government’s efforts to boost oil production, oil prices are still trading at a record $115 per barrel.
That’s down from a high of $155.50 in mid-July.
Oil prices are expected to remain below $115 a barrel for at least the next six months.
Analysts are predicting the oil market will remain in a state of high supply and high demand, and there will be an eventual fall-off in prices.
As a result, the market is expected to continue to expand over the next two years, according to an HSBC analysis released last week.
Despite the fall-offs in oil prices, analysts are not expecting global oil demand to fall, despite the glut of crude that is currently impacting global markets.