"The battle between the "sheiks and the shale oil producers" is far from decided. with all attempts by OPEC to achieve a lasting production deficit on the oil market being torpedoed by non-OPEC producers - first and foremost the US", analysts at Commerzbank wrote. Iraq, which is reportedly above its production target, has dropped its exports by 13 percent from the first month of 2017. "The last time the market had this level of certainty around long-term oil prices was before the rise in long-dated oil prices in 2003, almost 15 years ago", it said.
At the core of OPEC's strategy is to restrict supply to the Atlantic basin since the inventory data in the U.S.is the most timely and visible in the world and it is home to the key NYMEX futures contract.
Looking at the fundamentals however, the issue of supply outpacing demand still persists.
The production-cut agreement spurred a change in market structure that meant traders had less incentive to store oil at sea, prompting the flow of supplies floating on ships to onshore sites. Oil prices were boosted by the continued disruptions, which halted production at Libya's largest oilfield for the second time.
"Even after taking into account production cut pledges from the eleven countries that are not members of the Organisation of Petroleum Exporting Countries, OPEC, unplanned outages in Canada as well as in the North Sea, we expect production will grow again on a year-on-year basis by May", the IEA noted in its report.
May West Texas Intermediate crude CLK7, -0.70% rose 5 cents, or 0.1%, to trade at $52.70 a barrel on the New York Mercantile Exchange. US explorers added 11 rigs last week to cap the longest stretch of gains since 2011, data from Baker Hughes Inc. show.
Oil prices swelled to their highest levels since March 1.
China has a healthy appetite for oil (to say the least), and over the past four years its reliance on OPEC suppliers for crude imports has ballooned from 34 to 43 percent.
The minister also referred to production of gas in South Pars as one of the prioritized plans of the Oil Ministry in the current year.
GOLD rallied to a five-month high last Thursday before slipping slightly, on track for its best week since June, after the previous day's comments by US President Donald Trump on the strength of the dollar knocked the currency half a per cent lower.
Iran's Oil Minister Bijan Zanganeh was quoted by the media as saying that most oil producers support an extension of the agreement which was devised by Saudi Arabia past year.
Nobody said curing a global oil glut would be easy.
Chinese industry is not the growth engine it once was.
"OPEC and non-OPEC crude oil producers have displayed a historic spirit de corps in implementation of the organization's output cut plan which has proved a success and producers have shown more cooperative month over month", said Iranian Minister of Petroleum Bijan Zangeneh.
".early indicators of first quarter of 2017 demand support this, with slowdowns seen in January in Japan, Germany, Korea and India".
OPEC recently reported that its March production fell by 153,000 barrels to 31.93 million barrels per day.
For the full year, we see growth of 485,000 barrels per day (b/d), compared to a decline of 790,000 b/d in 2016. But the IEA has also noted that shale production in the United States (and elsewhere in the world where similar geology and topographies exist) is likely to undermine the deal.
Regardless, the future of the oil market rests in the hands of OPEC, and its decision on whether or not to continue their cuts.
There is no oil crisis, there is no shortage.