Russian crude oil output unchanged in June, in line with compliance

That combined two-year Canadian increase is equal to nearly a third of Opec’s production cuts that it made with allies like Russian Federation at the beginning of this year in an effort to raise prices.

Some analysts and traders said the decline was related to temporary factors such as production shutdowns in the Gulf of Mexico due to Tropical Storm Cindy and maintenance in Alaska. “It is thus doubtful whether (the) price rise will really prove lasting”, analysts at Commerzbank wrote. One is U.S supply side response to low oil prices.

Oil prices edged up, supported by first fall in USA drilling activity in months.

It rallied a little this afternoon and at the time of writing was at $45.35. Oil prices in American standard West Texas Intermediate rose by $ 2.28 a barrel to $ 53.78 barrel in morning. Historically, Venezuela’s basket set its highest weekly average ever on July 18, 2008, when it hit $126.46 before economies around the world began crashing under the weight of expensive oil. This enabled USA shale producers to expand their market outside the US. Morgan Stanley says global inventories across the OECD, China and various other countries rose by a million barrels in the first quarter.

Libyan oil production is moving in on 1 million barrels per day, near its pre-war capacity. Meanwhile, exports of crude oil and petroleum products amounted to six million barrels per day as of April 2017. “There is cause to be confident that the long-awaited oil market rebalancing is fast approaching”, Stephen Brennock, an analyst at PVM Oil Associates Ltd., told Bloomberg.

June OPEC production was up by 280,000 bpd at 32.72 million bpd, a Reuters survey showed, despite the group’s pledge to hold back output.

The copper market has recently been kinder to Goldman’s view. “As long as Libya and Nigeria can remain stable – Libya has ramped up several times over last couple of years and then the violence has come back”. While involving a natural gas field, the agreement could open Iran up to further investments from oil companies eager to tap into the post-sanctions climate in Iran, which is the only member of OPEC with room for production growth.

The primary concern for oil market investors is that the global oversupply question still looms large. Both Brent and United States benchmarks are yet to recover to yesterday’s 2-week highs, however, remain within touching distance.

WTI and Brent crude are both up 0.8% by mid-morning in London, reaching $45.30 and $48.02 per barrel respectively.

Forecasts for the future are also dire.

There were 682.4 million barrels in the strategic oil reserve. Libya, like Nigeria, is exempted from the cuts deal, though its oil production and exports remain vulnerable to disruptions by armed factions and restive workers. It is however in OPEC’s interest to wrap up its oil victory in price, volume produced and sold to give the desired revenue and bull market share. Zanganeh feels that an additional 700,000 barrels per day cut by March may solve the problem.