Goldman Sachs said it was “highly unlikely” the Organization of the Petroleum Exporting Countries would cooperate with Russian Federation to cut output, saying such a move would also be self-defeating as stronger prices would bring previously shelved production back to the market.
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But they sharply reversed direction as analysts further doubted a looming reduction in the amount of oil being pumped out by leading producers.
It is unlikely that anyone understands the current state of the energy market, Lavrov said, stressing the importance of monitoring the unfolding situation and exchanging opinions. Both continued to hold out the possibility of joint consultations between OPEC and non-OPEC countries in the near future, the Energy Ministry said.
OPEC has been making renewed calls for rival producers to cut supply alongside its members. USA gasoline inventories rose to a record high of 254.4 million barrels.
The commentary added, “We doubt that there will be any coordinated agreement even though the market remains oversupplied”.
Weak earnings reports from companies like Anadarko Petroleum and British giant BP dragged on crude oil prices during Tuesday trading, with West Texas Intermediate dipping below $30 per barrel by the end of the trading day.
Oman’s daily average production rose four per cent to 981,100 barrels in 2015 against 943,500 barrels in the previous year, recent statistics released by the National Centre for Statistics and Information (NCSI) showed.
Brent crude closed down $1.52, or 4.4 percent, at $32.72 a barrel.
Oil prices initially dipped a bit and stocks tumbled to the lowest levels of the session.
Saudi Arabia’s strategy of flooding the market with oil to force out rival producers in the US and elsewhere may well work, but it looks likely to take at least a year longer than anticipated.
Jadwa said it expected inflation to soar this year to 3.9 per cent, from 2.2 per cent last year, as a result of the price hikes.
The data showed production hit a fresh post-Soviet high in January of 10.88 million barrels per day, up from 10.80 million barrels in December, which was the previous record.
A rebalancing between oil demand and supply will not come until mid-2017, Morgan Stanley said in a note on Wednesday.
Demand for oil, particularly in Asia, proved robust a year ago, but not enough to absorb near-record supply and ballooning inventories of unwanted crude.
Iran, sitting on the fourth largest reserves in the world, now produces 2.8 million barrels per day and exports just over one million barrels.
Eventually, Russia’s crude production fell by 70,000 b/d, or 1% year on year, to 6.1 million b/d in 1998.
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The low of $32.30 in Brent also marked the halfway point between the price lows in January and the highs seen earlier this week, and a point at which speculators swooped in to buy.
