Low oil prices could impose big problems to the global economy. The decline was mostly due to countries outside of OPEC, such as Canada.
Iraqi Prime Minister Haider al-Abadi said on 16 May in a news conference broadcast on state television that "Iraq is with the continuation of a reduction of oil production of Opec nations and we will push in that direction". Douglas Rachlin, the managing director at Neuberger Berman's Rachlin Group, said on Wednesday at the SALT Conference in Las Vegas that "Saudi Arabia and OPEC are no longer in control". The "desired inventory level" won't be in place by the end of June and is more likely to occur in March, he said.
Russia's largest oil producer Rosneft said on Thursday it was ready to stick to crude output agreements with Opec.
Some even believed that Iran was the sole victor of OPEC deal.
Under the current deal OPEC, Russia and other producers agreed to cut output by 1.8 million barrels per day (bpd) for six months from January 1.
The price of WTI crude Oil does not seem to be bothered by the headlines signaling political turmoil in the USA, but rather is favoring the outlook that OPEC is expected to extend the production curb another 9-months.
Not too many people know, but OPEC is so rattled over US shale production that they actually sent a plea to the USA earlier this month asking the U.S.to not pump so much oil. What market analysts referred to as "the biggest oil market risk for 2017" now is seemed to be happening.
"For the global crude markets, fundamental demand strength in the coming weeks may have to come from seasonal gains in refining runs in Europe and Asia, led by China - provided that product demand and refining margins remain healthy". That raised expectations the Organization of the Petroleum Exporting Countries will sign off on prolonging the existing production agreement at its May 25 meeting. "Still, we shall see demand growth of around 1.3 million barrels a day outpace supply growth by at least 500,000 barrels a day".
"I think the cuts are enough to stabilize the market".
They need the prices above $50 for Aramco's bid to go as planned.
Declining costs for storage is another indication that traders and oil companies are putting less oil in storage than at the height of the price war.
At that gathering, the group is expected to agree to an extension of ongoing production cuts for cartel members and other producers such as Russian Federation.