Saudi Arabia Cut Crude Exports in January After OPEC Agreement

Russian Federation hasn't cut output as per the agreed terms with February production unchanged from January at 11.1 mbpd. Its members need higher oil prices to balance government budgets, but cutting back production to prop up prices means losing market share as other suppliers step in to fill the gap.

Meanwhile, West Texas Intermediate (WTI) crude was down 35 cents to $48.43, while Brent crude lost 24 cents to $51.52 a barrel on the New York Mercantile Exchange. As reports about the strong compliance rates began to filter out in early 2017, prices moved even higher. However, it's been all downhill in March.

WTI crude has "found itself vulnerable to heavy the rising drilling activity in the US reinforced the oversupply fears", said Lukman Otunuga, research analyst at FXTM, in a note.

The first issue that has dragged oil prices down is that US inventories have continued to rise year to date.

March 8 saw a significant turnaround among many hedge funds and their managers regarding oil.

Some of this increase is related to seasonal factors. Chinese jewellery demand rose during the new year holiday, while in India gold imports for February were more than twice their volume last year and about 52pc above the long-term average, according to UBS. "They will more likely opt for income and will push to get help from non-OPEC". "A major threat to the market, whether a BAT or simple tariffs are enforced, could arise from diminished oil and product demand as protectionist policies are sure to weigh on economic growth". Palm oil output is expected to recover from the second quarter onwards, as the effects of a crop-damaging El Nino fades away, and this might pull down prices to around 2,500 ringgit, say industry experts. The reality has been quite different.

Oil prices settled at their lowest level in almost a week, as another rise in active USA oil rigs renewed concerns over domestic production and some analysts anxious that a change to the G-20 policy statement may impact global trade.

United States crude oil settled at $26.21 per barrel on February 11, 2016.

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