For the month of January, OPEC contributed over 1.3 million barrels to the world oil oversupply, with Nigeria contributing to the oversupply.
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Talk of possible cooperation between Saudi Arabia and other producers to support prices has been around since December, but the latest data from the IEA show the opposite is happening.
Crude oil prices moved lower in early Monday trading after OPEC members offered few signs of lowering production to alleviate the lingering glut.
US crude was down 15 cents at $27.79 a barrel by 12:53 p.m. EST (1752 GMT), after falling as low as $27.39.
In the report, EIA forecast global oil inventories to increase by annual average of 1 million b/d in 2016 and by an additional 300,000 b/d in 2017, both higher than previous forecasts (OGJ Online, Feb. 9, 2016).
“With the market already awash in oil, it is very hard to see how oil prices can rise significantly in the short term”, the Paris-based adviser to 29 nations said in its monthly market report.
“We expect a stronger response from supply side”, said Lee, adding that higher oil-production costs in offshore and deep water would come down.
While the DoE in January was counting on a barrel of Brent, the European benchmark crude to average $ 40 this year, it lowered its forecast to 38 dollars, although it has not changed that WTI, also expected to price in 2016. Following a meeting with Venezuelan Oil Minister Eulogio del Pino last week, Mr. Sechin and Mr. Novak had agreed to be a part of any discussions surrounding supply cuts being held.
Oil demand is now forecast to rise 1.25 million barrels a day to 94.21 million barrels a day this year, OPEC said, citing consumers cutting back on auto transport and the lingering impact of the recent financial crisis.
Mr Frydenberg said Dr Birol’s comments were a reminder of why the IEA, a body founded in 1974 to coordinate a response in the case of a major supply disruption, was set up.
“Given the falls that we have seen over the last three trading sessions, it is a little surprise to see such aggressive selling interest during our time zone”, said Michael McCarthy, chief market analyst at CMC Markets in Australia.
Ahead of the trade sanctions lift, Mr. Zanganeh had been reported to have said at multiple occasions that the country would be looking to increase production rates by 500,000 barrels a day right after the lift, and by another 500,000 soon after.
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The Nigerian budget has a crude oil target of $38 per barrel and a production level of 2.2 million barrels – both of which are now under-delivering.
