FXStreet (Mumbai) - The U.S. Energy Information Administration reported that crude inventories in the United States increased 2.6 million barrels last week. The figure is higher than the 2.5 million barrels estimated by analysts. The rise in crude inventory once again highlighted the global oil glut scenario. Analysts polled by Reuters had expected a draw of. Oil price has slumped in the last on year primarily because of over-supply which is largely the result of OPEC’s decision taken in November 2014 to pump record volumes in order to defend market share. On 28th December oil fell more than 3 per cent with benchmark Brent close to its 11-year lows. U.S. WTI crude futures traded at around $36.70 per barrel at 0740GMT today; while Brent traded around $36.66 per barrel. The figures reveal both these benchmarks have fallen by around a third over 2015. Markets are worried that there remains a strong possibility that crude prices will further fall in 2016. Global crude production is estimated to have exceeded by between half a million and 2 million barrels per day. This essentially means even if U.S. production cuts of 500,000 bpd for 2016, it will not be completely possible to rebalance the market. Both OPEC as well non-OPEC members such as Russia will have to slash production to check prices from further spiraling. Analysts like Goldman Sachs now believe that the current condition is such that oil prices are required to fall to $20 per barrel as only such low price environment will push some production out of business thereby making way for stabilization of prices. U.S. bank Morgan Stanley also paints a grim picture saying "headwinds (are) growing for 2016 oil." The bank feels "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”. Markets broadly believe that higher oil prices will not return until late 2016. Also, traders expect that in 2016 some U.S. oil will be made available in global markets as the U.S. crude export ban has been lifted in December. The ING bank thus believes that "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.” 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. For more information, read our latest forex news.