* Crude oil prices lost a third in value in 2015
* Outlook for 2016 remaions bleak as oversupply balloons
By Henning Gloystein
SINGAPORE, Dec 31 (Reuters) - Oil prices opened the final trading session of 2015 in a downbeat mood after record U.S. crude inventories reinforced concerns over a global supply glut that has pulled down prices by a third over the past year.
Crude inventories in the United States, the world's largest petroleum producer, rose 2.6 million barrels last week, the U.S. Energy Information Administration said. Analysts polled by Reuters had expected a draw of 2.5 million barrels. EIA/S urn:newsml:reuters.com:*:nL3N14J1OI
Crude prices held losses after falling 3 percent in the previous session, with U.S. West Texas Intermediate (WTI) crude futures CLc1 trading around $36.70 per barrel in early Asian hours on Thursday and Brent opening around $36.60 per barrel.
The immediate outlook for oil prices remains bleak, with some analysts like Goldman Sachs (N:GS) saying prices as low as $20 per barrel might be necessary to push enough production out of business and allow a rebalancing of the market. urn:newsml:reuters.com:*:nL3N13P4L2 urn:newsml:reuters.com:*:nL1N1440DB
U.S. bank Morgan Stanley (N:MS) said in its outlook for next year that "headwinds (are) growing for 2016 oil" citing ongoing increases in available global supplies despite some cuts particularly by U.S. shale drillers as well as a slowdown in demand as the main reasons.
"The imbalance in the global oil market has been diminishing in 2H15, but the hope for a rebalancing in 2016 continues to suffer serious setbacks," the bank said, reflecting a market consensus that meaningfully higher prices are not expected before late 2016. L8N14J03J
Traders expect some U.S. oil to be taken out of America and supplied into global markets, following the surprise lifting of a decades-old U.S. crude export ban in December, which ended a years-old discount in U.S. crude prices to international Brent CL-LCO1=R as urn:newsml:reuters.com:*:nL1N14J1E5
"At a time when U.S. shale is facing headwinds due to the collapse in crude oil prices... U.S. crude oil exports are likely to help reduce congestion concerns in the U.S.," ING bank said.
INDUSTRY PAIN
Oil prices began falling in mid-2014 as ballooning output from the Organization of the Petroleum Exporting Countries (OPEC), Russia and also U.S. shale drillers started to outpace demand. The downturn gained pace at the end of 2014 after a Saudi-led OPEC decided to keep production high to defend global market share rather than cut output to prop up prices.
A year on, and the oil downturn has turned into a rout with Brent prices briefly falling below $36 per barrel and to levels last seen in over a decade, effectively wiping out the gains from a decade-long commodity super-cycle sparked by China's unprecedented energy demand boom. urn:newsml:reuters.com:*:nL8N14B066
The downturn has caused pain across the energy supply chain, including shippers, private oil drillers and oil-dependent countries from Venezuela and Russia to the Middle East. urn:newsml:reuters.com:*:nL1N13Z02D urn:newsml:reuters.com:*:nL8N14A36O urn:newsml:reuters.com:*:nL8N14H1GN urn:newsml:reuters.com:*:nL8N14A0BU
Analysts estimate global crude production exceeds demand by anywhere between half a million and 2 million barrels every day. This means that even the most aggressive estimates of expected U.S. production cuts of 500,000 bpd for 2016 would be unlikely to fully rebalance the market.
Russia and OPEC are so far showing few signs of reining in production, leading traders to establish record high active short positions in the market 1067651MSHT that would profit from further crude price falls.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ GRAPHICS-Tumbling oil erases decade of China-fuelled super cycle
nL8N14B066 GRAPHIC-Managed short positions vs U.S. crude price:
http://tmsnrt.rs/1mhSVuv
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Editing by Richard Pullin)