Though the deal proposed a cut of 1.8 million barrels, commodity analysts are of the view that this number could be increased. He said although prices may rise next quarter, declines could resume afterward.
Russian Federation and Saudi Arabia said Monday they want to extend oil production cuts through the first quarter of 2018, in a move the two major producers say would support the market price. The ongoing struggle to thin supplies has forced economists to cut their oil price forecasts. For all the attention paid to changes in USA shale output, OPEC is capable of swinging oil balances more in a single month than United States shale can in a year. Prices are up 4.4 percent this week, the most since the period through March 31.
"Having seen an initial short-covering rally, we now need OPEC and non-OPEC producers agreeing on the nine-month extension for the market to begin build up new long positions", Hansen said. "How much is going to come out?"
Currie believes prices won't break out until investors see "real, observable inventory draws".More news: I'll defend country, says new French President Macron
Describing the USA president as "in trouble", PVM analyst Tamas Varga said the health of the US economy could more or less withstand an early end to the Trump presidency. EIA information showed distillate stockpiles, which include diesel and heating oil, were down by 1.9 million barrels, versus expectations for a 1.1-million-barrel decline.
At one of the world's largest oil storage facilities - on the shores of Saldanha Bay in South Africa - millions of barrels were sold in recent months, traders told Reuters.
More possible good news for the oil industry.
The price for Brent crude oil is about $2 less per barrel than where it started the year. Record breaking USA inventory figures in the first quarter were also weighing on the oil prices.More news: France's Macron to meet European Council chief Tusk on Wednesday - presidency
The big focus seems to be on global oil inventories that remain above the 5-year average. "On the other, there are those who are focused on the real drawdowns that have started to occur in US oil stocks over the past month or so". With higher oil prices, the IPO is likely to perform better. U.S. West Texas Intermediate WTI crude rose 78 cents, or 1.6%, to $49.44 U.S.
Parking oil in a supertanker off the shore of Singapore, Asia's refining hub, costs anywhere from 30 to 40 cents a barrel per month, down from 50 to 80 cents just a few months ago. The contract decreased 17 cents to settle at $51.65 a barrel on Tuesday. These sanctions resulted in roughly 800,000 barrels per day of Iranian production being shut-in between January 2012 and December 2015.
Shipping data in Thomson Reuters Eikon shows that US oil exports to Asia have soared from just a handful of tankers per quarter throughout 2015 and 2016, to 10 tankers in the first quarter of this year, a figure expected to rise.More news: 'American Idol' Is Revived by ABC
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