Oil Prices Fell After OPEC's Forecast

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Technically, the deal now permits Libya and Nigeria to continue with unfettered production for the rest of 2017 and into the first quarter of 2018, but there are some indications that OPEC may pressure these two countries to cut production sooner.

Rob Haworth said that prices are likely to remain at the lower end of the current trading range until U.S. oil investment and production fall.

"Attempts to curb United States shale out of the market have had muted effects, though it has somewhat rescued oil prices from falling".

While world demand is climbing faster than initially estimated, OPEC's implementation of the supply cutbacks needed to clear the inventory surplus has faltered to its lowest level since the group began in January, the Paris-based agency said.

Many have also voicing out on requiring an output limit to Nigeria and Libya and without any kind of production restraint on either of them; oil prices only have a small chance of reaching the $50 level again.

"We'll still have below the benchmark set for us by OPEC and I think that over the next one or two months, hopefully, we can get to that point when we can say the recovery has been tested, is systemic, and predictable".

"Each month something seems to come along to raise doubts about the pace of the rebalancing process", the International Energy Agency (IEA) report said. We also expect to see upward revisions in EIA gas demand data that was under-reporting demand earlier in the year.

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Rising U.S. shale production is also putting pressure on the OPEC agreement.

There was evidence of strong important demand from China in June's trade data with average imports increasing to 8.55mn bpd during the first half of 2016, an increase of 13.8% from the same period in 2016.

OPEC members are having trouble keeping their promises.

A coalition of 24 OPEC and non-OPEC countries including Russian Federation have been throttling their output since January to prop up prices.

Oil prices extended their gains at the start of Wednesday's Asian session after the USA government slashed its crude production expectations for next year and fuel inventories declined. Militancy, attacks on oil infrastructure, and port terminals blockades have quieted in both African countries, therefore further increases in production are likely. The EIA report showed inventories fell by 1.6 million barrels, compared with analyst' expectations for a 1.1 million barrel gain.

However, market watchers should keep a careful eye on the numbers, because Libya and Nigeria may not actually be required to remove almost as much oil from the market as might be assumed. "We all agreed that we should continue these meetings", he added.