OPEC minister hinted that Libya and Nigeria would have to cap their output. However, the news was not enough to keep oil higher as it traded near the lowest closing point in two weeks.
The two producers were exempt from production-cuts thanks to internal conflicts. The African suppliers have been asked to attend meetings in Russia on the 24th of July to discuss whether output has stabilised. Combined, the two have produced an extra 444,000 barrels per day in May and June.
Oil remains in a bear market as investor’s over-supply anxieties have failed to be quenched. In order to reverse the trend, there will have to be larger cuts to production from the US. Although, at this point, this seems unlikely.
Prices plunged last week after Russia refused to deepen supply cuts which outweighed the news that US stockpiles were at their lowest since January. The market is extremely sensitive to negative news however less reactive to bullish news.
Adding to the dismay, Saudi Arabian output increased in June by the most in just about a year. Meanwhile, the US keep adding rigs and production keeps rising. Concerns about the over-supply have capped gains for oil, trading below $50 for the past six weeks.