Iran Crude Oil Slips Below $50

The statement, made on the sidelines of an economic summit in China, is an admission that the efforts of the world’s biggest exporters to balance the world oil market by holding back 1.8 million barrels a day of crude have failed to end the current glut as quickly as they hoped. “The onus was on OPEC to up the ante which is what they did today with the surprise announcement”, Essner said.

The effects of these talks have has a substantial effect on the oil price.

A market analyst on Wall Street said that the financial markets showed signs they were stabilizing on Monday, but with a sparse amount of key data from the USA this week, a threat continues to have a corrective move.

A rally followed after Khalid al-Falih, Saudi Arabia’s energy minister, said he still expects the cartel’s deal to cut production to be extended for the whole of 2017.

“However, we’ll see whether the rebound remains until the United States market opens”.

Last week, oil futures settled almost flat on Friday, but still registered the first weekly gain in a month on the likelihood that key crude producers will extend output cuts beyond an agreed-upon June deadline when they meet later this month.

Oil prices jumped over 2 percent on Monday, after Saudi Arabian and Russian oil ministers confirmed their intention to extend supply cuts into 2018. Intercontinental Exchange-traded Brent was ahead 2.75% to $52.24 a barrel.

This likely reflects the disappointment in the pace of stock draws (although, as we have argued, this is seasonal and backward looking), the continued skepticism on the level of compliance with the cuts (although shipping data confirm the high April compliance) and the recent increases in Libya and Nigeria production.

“That said, we are skeptical about Russia’s willingness to actively participate in any extended cuts”, Fritsch told Bloombnerg. According to both the ministers, the deal aims to rebalance the supply and demand globally with an aim to bring down global inventories to the levels of the 5-year average.

The Saudi and Russian ministers said they would lobby other producers to achieve “full consensus” on prolonging the policy of supply restraint at a meeting next week, the ministry added.

But there’s one thing standing in the way of higher prices: US oil production.

“With the USA rig count increasing for its 17th consecutive week, I think we can safely say that the crude oil battle is well and truly on”, said Matt Stanley, a fuel broker at Freight Investor Services (FIS) in Dubai. “It would be nice to see it get inside a five year range at the very least”, he said.