Hedge funds cut bullish bets on USA crude for the second straight week, data showed on Friday, as the price of oil fell on rising output in the United States, Canada and Libya as well as weak compliance on a deal between OPEC and other producing countries to cut output.
Investors are anxious that Opec nations will fail to rein in output further at their next meeting later this month.
Reuters reported that prices fell Thursday on indications that OPEC and other producing countries wouldn't take additional big steps to cut production. They announced output cuts of 1.8 million barrels per day for the first six months of 2017.
Back in 2012, the price of a barrel of Brent Crude was over $120 ($127 in March 2012) and had been higher before the Global Financial Crisis really bit.
The participation of Azerbaijan in joint oil production cuts is defined at 35,000 barrels per day.
NAN reports that on April 19, OPEC Secretary-General Mohammad Barkindo said that all oil producers taking part in a supply-cut pact are committed to bringing global inventories down to the industry's five year average and restoring stability to the market.
CRUDE CONCERNS: U.S. benchmark crude futures fell under the key $45 level after tumbling almost 5 percent during U.S. trading.
In response, the Organization of Petroleum Exporting Countries is likely to extend the 1.2 million barrel-a-day cut agreed to in November for six months, according to Nigerian Oil Minister Emmanuel Ibe Kachikwu.
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OPEC's production cut in November was the first time the consortium agreed to limit its output since 2008.
Crude oil lost ground on Thursday, falling for a third out of four sessions and trading near its lowest since late March after data showed a lower than expected decline in US inventories.
"It certainly may have reinforced people's negative expectations for USA oil demand going forward", Mr. Saucer said.
OPEC sources said on Thursday that OPEC is likely to extend cuts when it meets on May 25, but that a deeper cut is unlikely.
"The market appears to have temporarily lost faith in ever seeing an impact of the OPEC cuts on inventories", Michael Cohen, head of energy commodities research at Barclays Plc in NY, said by telephone.
Crude futures settled higher on Friday, recovering from a five-month slump, after Saudi Arabia said its supports the idea of extending the supply-cut agreement beyond June while the number of active US drilling rigs rose for an sixteenth straight week.
As U.S. producers continue to unleash a steady, and strong, stream of shale oil into the market, it intensifies pressures on OPEC and Russian Federation to continue keeping their output capped to prevent further price erosion.
Tamas Varga, an analyst at London brokerage firm PVM, said in a daily newsletter that the latest figures from the United States, the world's largest economy, are "not so bullish" for crude oil.