At the end of 2016, OECD oil stocks were still 286 million barrels above the five-year average and they are likely to remain significantly above average at the end of June, the IEA said. Russian Federation pledged to gradually reduce supply by as much as 300,000 barrels a day, more than half the total non-OPEC pledge for a 558,000-barrel-a-day reduction.
Worldwide large cap companies continue to bring down operating costs, suggesting more production will be achievable around current prices.
The Sunni and the Shiite world want either to grow and diversify or recover from the long season of global sanctions - as is the case for Iran.
A handful of major producers outside OPEC - including Russia, Mexico and Kazakhstan - agreed to join OPEC members in their effort to restrain supply. But the manipulation of the oil market just prolongs the inevitable rebalancing process, nobody has still yet to go out of business in the oil markets.
And it predicted that demand would increase again by 1.4 million bpd to 98 million bpd in 2017.
If the cut had not been made, the oil price per barrel would have fallen below 30 dollars, but now the most reliable analysts estimate that oil prices may grow from 50/65 U.S. dollars up to 70.
Benchmark Brent crude fell as much as 61 cents in London on Wednesday and was trading at $54.86 a barrel at 1:06 p.m. local time, on course for a third daily decline after industry data showed US stockpiles surged. The figures are important as Platts is one of the sources used in OPEC's official secondary sources survey in its monthly oil market reports (to be published Feb.13).
The IEA has also increased its forecast of non-OPEC countries' oil production by 100,000 barrels daily to 58 mln barrels per day in 2017. China imported 8.05 million barrels a day in January, according to Bloomberg calculations based on data Friday from the General Administration of Customs.
The overhang is nearly evenly split between crude and liquids on one side and oil products on the other.
Carmelo Anthony May Wait Out Phil Jackson With Knicks
The true answer may be revealed before Feb 23 when the trade deadline ends, according to the National Basketball Association . On Tuesday, Phil Jackson took a shot at New York Knicks star Carmelo Anthony in the most Phil Jackson way possible.
Brent crude futures LCOc1, the global benchmark for oil prices, were trading at $55.68 per barrel at 0427 GMT, up 5 cents from their previous close. "Despite the stronger US dollar.DXY and lingering concerns about USA (oil) inventories, traders returned their focus to the OPEC production cuts being implemented at the moment", it added.
"The push and pull between competing forces in the crude oil market continued overnight".
Coupled with the IEA's 100,000-barrel per day upward revision to demand increase expectations to 1.4 million barrels, the Paris-based watchdog's data should have a positive impact on the oil markets, both domestic and global.
OPEC implemented 90% of the promised cuts in output during January, the first full month of the agreement, as its biggest member Saudi Arabia lowered its production even more than it committed to, said the IEA.
Saudi Arabia, which is ostensibly OPEC's leader, stands to gain from the bump in oil prices that lower production levels could stimulate.
Moreover, now Saudi Arabia has reached its maximum production level, but it may have technological capabilities to increase it by 25% for a short lapse of time.
Hence speculative capital will come back on oil markets, thus temporarily abandoning the other alternatives: non-oil commodities, currencies, gold and precious metals, as well as many government bonds. It will not be an easy task.
Other counties, such as Algeria, Venezuela and Iraq, are producing more oil than their quota.
Growing production outside of OPEC could dampen the cartel's hopes to raise prices gradually over the coming years. In fact at the current pace we are going to blow through that previous record of 510 Million Barrels of Oil stored in private reserve facilities. Eleven members of the Organisation of the Petroleum Exporting Countries had agreed to pump less from January to raise prices.