Pressure has been on the rise since the International Energy Agency published its monthly report acknowledging that the oil market was now balanced and that commercial glut in major industrial countries fell by about 1 million barrels.
With such tightness in the market, Commerzbank said oil at US$80 a barrel would "raise the probability of a production increase", to ease the price. The "EIA report was bearish with a almost 6 million-barrel build in total petroleum".
As per the data, Friday ia showing the biggest weekly rise in the number of active US oil rigs, which suggests a possible uptick in production, also contributed in the decline in prices.
Russia's oil output reached a 30-year high of 11.247 million bpd in October 2016 and it pledged to cut it by 300,000 bpd to 10.947 mln.
"I think I was prodded by his excellency Khalid Al-Falih that probably there was a need for us to respond".
The president of Prestige Economics, Jason Schenker says, "oil prices are being supported by the prospects of a very strong imminent driving season", and says this demand could keep the price high.
OPEC and its partners are to meet formally in June, but the Saudis and Russians will hold at least two more meetings before that.
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In the five-year forward prices, speculators and analysts look at the longer-term forecasts for supply and demand that are more "shielded" from the geopolitical risk premium that pushes the $80 oil rally we all see in the charts.
NEW YORK, May 24 ― Oil prices fell about 1 per cent today, with expectations building that Opec could wind down the output deal in place since the start of 2017, due to supply concerns out of Venezuela and Iran.
The final production number is not set yet as dividing up the extra barrels among deal participants could be tricky, the sources said.
"Higher prices have begun to impact forward demand expectations and OPEC and Russian Federation, being willing and able to increase production, may have been looking for a way out of the deal which would not upset the market too much", he said.
"The talks now are to bring compliance down to the 100 percent level, more for OPEC rather than for non-OPEC", one source said.
Following this statement and reports that other OPEC members could be mulling over higher production, to be discussed at the next OPEC+ meeting in late June, oil prices began to slide down, helped by assurances from Europe, China, and India they will continue to buy Iranian crude despite US sanctions.
The rapid decline in oil inventories and worries about supplies after the US decision to withdraw from the global nuclear deal with Iran, as well as Venezuela's collapsing output, were behind the change in OPEC's thinking.