Various developments promise to keep prices in the doldrums for the foreseeable future.
The first week of April began with a familiarity that characterized the market in March, with West Texas Intermediate dropping 36 cents to close at $50.24 and Brent dropping 41 cents to $53.12 per barrel, in reaction to more Organization of the Petroleum Exporting Countries (OPEC) cutback rhetoric and developments that threaten to keep overall oil production at a pace far outstripping demand.
The reopening of Libya's biggest oil field resulted in that country's output rising to about 660,000 barrels per day (bpd) and fulfilling the warnings of experts last week that the stalled production - rumoured to be due to civil unrest -would be merely a blip given Libya's pressing dependence on oil revenues.
The resumption of activity also stalled a rally that Gene McGillian, manager of market research for Tradition Energy, says was about to occur "on the signs that the OPEC production agreement will be extended."
Mohammed Barkindo, secretary general, OPEC
We have started seeing stock levels coming down
Another development widely viewed as discouraging to the market is a Venezuelan Supreme Court amendment to its decision to take over that country's congress but still gives leftist president Nicolas Maduro broad powers over the OPEC nation's vast oil reserves.
Maduro's government, which has sanctioned all-out oil production and driven the Venezuelan economy to the brink of collapse, now has the power to sell stakes in the country's oil fields or launch new joint ventures with foreign firms; lawmakers and critics call this a desperate bid to generate revenue and warn that it will further discourage foreign investors from doing business with the Bolivian republic.
But as far as Mohammed Barkindo, secretary general for OPEC, is concerned, all is going to plan with regards to the bigger picture: after attending a conference in Baghdad he told reporters that Iraq's compliance is now 98 percent and that he was assured by that country's oil minister, Jabar al-Luaibi, that it will fully comply with the OPEC agreement to slash supply, now in its third month.
Yet again, Barkindo went on to say that compliance overall is "encouraging" and the market is already balancing: "I remain cautiously optimistic that the market is already rebalancing; we have started seeing stock levels coming down."
He did not mention, however, that Iraq has also vowed to boost oil production capacity to 5 million bpd before the end of this year and increase its reserves by 15 billion barrels in 2018, to reach 178 billion barrels.
Upbeat OPEC news of late has utterly failed to budge a steadily downward oil price spiral: last week the announcement of the United Arab Emirates finally playing an active role in the cuts along with Russia and Iran continuing cooperation in reducing oil output did not impress people such as Bill Baruch, chief market strategist at IITrader, who pointed out that rampant U.S. shale production will continue to wipe out any gains made by the cartel.