He blamed the lingering low crude oil prices to increased aggressive shale oil production by the USA, although he noted that Nigeria and Libya were now being shielded from the pressures due to the exemption from output cut policy granted the duo by OPEC last January.
A bigger than anticipated 7.6 million barrel decline in USA crude inventories caused West Texas Intermediate on Wednesday to rise 45 cents to $45.49 per barrel and Brent to climb 22 cents to $47.74 - but various sources caution that this does not herald any substantial price hike, and that indeed crude could still plummet below the $40 mark.
PublicInvest said the estimation was made based on its analysis of WTI and Brent's futures trades. They had both traded at losses, about $1 lower than their recent price, before surging to gains around the traditional start of USA trading hours.
After very choppy trading following the EIA inventories report, crude oil settled below the $46.00 p/b level late in the United States session.
Fresh cracks were exposed in OPEC's agreement to cut production, as signs emerged that the oil group is struggling to adhere to the deal.
"I think maybe there's more confidence of staying in the $40s", he said.
Shale producers "need to join us so that together we can restore stability and maintain it", Barkindo said.
USA crude oil production, meanwhile, has proven more resilient to historically low crude oil prices than initially expected as operators in the shale basins in the Lower 48 become more efficient.
On Wednesday, July 12, 2017, the EIA (U.S. Energy Information Administration) released its weekly petroleum status report. That's a change from two months ago when the IEA said the " rebalancing is here" and was accelerating in the short term. In its report, the IEA raised its demand forecast to growth of 1.5% this year to 98 million barrels a day, a revision of 100,000 barrels compared with a previous estimate last month. That was the biggest supply drop since September.
"We have now witnessed two weeks in a row of massive USA inventory draws", analysts at Piper Jaffray Cos.' Simmons & Co. These reports suggest at least partial consensus that global oil demand is growing faster than production.
On the impact of the slow production on Nigeria's budget, Mr. Kachikwu said with projected 2.2 million barrels and benchmark price of price of $42.50 per barrel approved in the budget, the country lost about four months due to delay in the approval of the budget.
Only a handful of OPEC countries are in full compliance with the cartel's agreement to limit crude production, according to the International Energy Agency. Without some sort of production restraints on that duo, oil prices have little near-term chance of returning to the $50 zone, said Stuart Ive of OM Financial.
Gasoline futures recently gained 0.5% to $1.5279 a gallon.