OPEC said Thursday it see oil "well supplied" and downgraded its global demand forecast. Brent crude dropped 3% on the news. Brent crude dropped 3% on the news, sending oil stocks such as ExxonMobil and Chevron Corporation down more than 3%.
Oil stocks took a beating Thursday after OPEC said its production rose in September, easing concerns about a drop-off in Iranian barrels as US sanctions loom. Brent crude dropped 3% on the news, sending shares of oil producers such as ExxonMobil and Chevron Corporation down more than 3%.
"The market has been reacting to perceptions of a possible supply shortage," OPEC Secretary-General Mohammad Barkindo said Thursday on a conference in London according to Reuters. "The market remains well supplied."
Barkindo added that OPEC was wary of creating a glut next year and suggested producers were in no rush to raise output.
The cartel also downgraded its global demand forecast for a third straight month amid concerns about the prospect of slowing economic activity around the world.
Oil prices have rallied this year as market watchers expect that US sanctions on Iran, OPEC's third-largest oil producer, will reduce oil supplies. Brent crude reached a four-year high of $86.74.
But Barkindo said there were many non-fundamental factors influencing the oil market that were beyond oil producers' control.
"We have to continue to assess to see how and when we will achieve the 100% conformity and how the market would respond, hoping that some of these non-fundamental factors will evaporate by then," he said.