Production fell for the second consecutive month due to the production cut deal.
“You need that timeframe to see if any recovery is sustainable”, he pointed out.
This is a problem for the countries which need prices to be in the $60-plus range, said Croft, who said the key goal of the agreement between OPEC and non-OPEC members to limit output which is set to expire in March 2018, was to push prices above $60.
According to the EIA, the lower refinery demand for crude oil and limited ability to move crude oil resulted in crude oil inventory builds at Cushing, Oklahoma, and the Gulf Coast of 800,000 barrels and 1.7 million barrels respectively as of Friday, September 1. Nigeria’s own output numbers are lower. It fell in Libya, also exempt, and in Venezuela as both countries struggle with political trouble.
Aside from total USA crude stockpiles, oil centered in the Cushing, Oklahoma hub, which stores supply meant for delivery against WTI contracts, has abeen rising.
But a timeline or framework to measure steady production and the country’s entry into any deal has never been specified.
“We have a nine-month exemption period within which to come back to the table”, Kachikwu told FT.
“Oil demand has been quite robust in 2Q17, particularly in the Americas and Europe”, the report said.
“$60 is looking very, very tough right now if you look at the sort of numbers coming out from United States shale”, he added.
Meanwhile, the market continued to assess Hurricane Irma’s effect, as many refineries are restarting right now and lifted demand for American crude.
WTI is in a contango of more than $1 per barrel for the first half of 2018 compared with just 8 cents in Brent (http://tmsnrt.rs/2jlVfUe).
OPEC has been looking to boost prices through production cuts amid a supply glut that has more than halved oil prices over the past two years. Analysts forecast crude inventories last week rose while products drew down.
According to data provided by the Russian Energy Ministry to OPEC, Russia reduced average daily production in August by 40,000 barrels per day in comparison with July – to 11.22 mln barrels.
Oil prices were mixed early today, but largely held on to gains in the previous session after Opec said it expected higher demand for its crude next year.
OPEC pegged demand for its crude at 31.8 million barrels a day in the first quarter, and at 32.4 million in the second quarter.
Al-Falih said longer-lasting curbs “would be considered in due course as market fundamentals may dictate”.