Barclays also cut its 2017 and 2018 Brent forecasts to $52 a barrel for both years from $55 and $57 respectively. Demand next year is expected to rise 1.4 million bpd to 99.4 million bpd.
Last month, global oil supply rose by 720,000 bpd to 97.46 million bpd as producers opened the taps.
"The fundamental difference is therefore leading to a tighter supply condition situation of the medium sour market, while a glut remains for the light sweet market based on S&P Global Platts", PublicInvest added. In such a case a deeper cut might pressure prices further instead of supporting them. It was larger as the United States released more than 3 million barrels of oil from the Strategic Petroleum Reserve, which means the drop would have been more than 10 million barrels of oil lost in a week. Output also rose in Nigeria and Libya, but they are exempt from the deal. The IEA seemed to ignore improvement from non-OPEC oil producers that joined in the pact that saw their compliance improve.More news: Wanda selling theme parks and hotels in $9.3B deal
Kachikwu also said he would not attend a meeting between OPEC and non-OPEC nations on July 24 in Russian Federation, because he would be hosting a meeting of African oil producers in Abuja on the same day. The meeting will take place on July 24 in Russian Federation.
According to Gary Ross, global head of oil at PIRA, while the U.S. will rank in the top ten oil exporters, it is unlikely it will either join OPEC or cut production in an effort to keep prices up, because it simply has no interest in doing so: it strengthens Donald Trump's political agenda of "energy dominance". But at 495.4 million barrels, USA crude oil inventories were in the upper half of the average range for this time of year. Total OPEC production rose 340,000 bpd in June to 32.6 MMbpd. If Libya and Nigeria do not experience any more disruptions due to violence or political instability, it is very likely that these countries will have no choice but to comply with the production cut. However, the geopolitical uncertainty could quickly cut production levels once again.
The number of rigs in operation has more than doubled from May 2016. Although the EIA reported drawdowns in inventories, it also reported a rebound in production figures, dashing hopes that output was on the decline. The oil glut, of which the US shale boom in the USA has contributed to, reduced oil prices and the revenues of oil producing economies.More news: Kerber survives another day at Wimbledon
PIRA Energy has predicted that USA crude oil exports will top 2 million barrels by 2020, reaching 2.25 million bpd.
By the IEA's estimate, it's not just three members undermining OPEC's efforts. As of 2016, the US average daily export rate was just 520,000 bpd, although in May, the average daily was 1.02 million barrels.
Oil prices flipped to gains Thursday with growing momentum behind the International Energy Agency's prediction of higher global demand. We would continue to monitor the level of compliance with the deal.More news: Nuclear weapons ban is an antidote to cynical brinkmanship