Increasing U.S. output is undermining attempts by the Organization of the Petroleum Exporting Countries and other major oil producers to curb output and sustain higher prices on oil market. Prices lost 53 cents to US$52.65 yesterday, the lowest close since April 7.
Crude oil prices were pulling close to even in early trading Monday, following weakness overnight sparked by lingering USA energy sector gains.
He said "conformity" within OPEC and other producers was improving and that the UAE was complying 100 percent with its pledge to cut production.
Oil prices dropped below $30 per barrel in early 2016 as USA crude oil production gains added to a market where OPEC was defending a market share with more robust output. Meanwhile, crude throughput, or the amount of crude that goes into a refinery before it comes out processed, rose 4.5% on-year to 11.25 million barrels a day in the same period. Iran fed hopes that OPEC and non-OPEC producers would extend the cuts, but Saudi Arabia's energy minister said it was too early to discuss an extension.
Late April 13, prior to the Easter holiday period, oilfield services firm Barker Hughes reported that its weekly U.S. rig count rose by 11 to 683.
As noted in last year's IEA report, demand for oil is rapidly changing.More news: Russia Relations May Be At An 'All-Time Low'
But year to date, prices for West Texas Intermediate crude CLK7, -0.38% have traded in a relatively tight range of $47 to $55 a barrel on the New York Mercantile Exchange, while Brent crude LCOM7, -0.39% on the ICE Futures exchange in London, has traded between lows around $50 a barrel to highs just above $57.
The oil markets are caught in a puzzle.
Opec and other producers, including Russian Federation, agreed late in November to cut output by around 1.8mbpd in the first half of 2017 to rein in oversupply.
Any increase in output in the United States, now the world's third-biggest oil producer, was likely to put pressure on oil cartel Opec - which agreed to curb output at the end of 2016 - to cut production further.
Saudi energy minister Khalid al-Falih has insisted that there exists a consensus within the organisation to stabilise the oil market and that producers would do whatever was necessary to achieve that goal. With European growth still "anemic", she said the US market is one of the main contributing factors to the price of oil.
Oil prices fell on Tuesday, then slid more in post-settlement trade after an industry group reported that US crude stockpiles fell less than expected in the latest week while gasoline stockpiles grew unseasonably. "As the EIA explains, "[much] of Chinese production growth from 2012 through 2015 was driven by more expensive drilling and production techniques, such as enhanced oil recovery (EOR) in older fields". One US air strike on Syria does not make an oil price crisis, Colin Cieszynski, chief market analyst for CMC Markets in Canada, told Global News.