Oil Prices bounced back on Monday effectively extending last week’s rally riding high on the speculation that OPEC might choose to slash production to cut the oil glut that pushed oil prices to their lowest in more than a decade.
Because of unstable trading last Friday, oil price has dropped again and ended the week at lower prices, cutting short their two week gains. The market reacted to frenzied rumors that the biggest oil producers will strike a deal leading to a global oil glut.
Trading per oil barrel went to almost half, but OPEC still refuses to cut production as it seeks to recover market share by slowing the higher cost production in the United States and other countries.
Members of the Organization of the Petroleum Exporting Countries (OPEC) should prepare for extra Iranian crude production when Western sanctions on Tehran are lifted, Iran's oil minister was quoted on Tuesday by state news agency IRNA as saying.
Oil prices rallied more than 2 percent on Thursday, clawing back part of a 6 percent slump triggered by a jump in U.S. crude inventories and record Saudi output, although analysts said sentiment remained bearish.
U.S. oil output could start to take a hit by late 2015, OPEC said on Monday, suggesting the exporter group will have to wait beyond its next meeting in June to see if the oil price collapse is beginning to dent the shale oil boom.
Oil prices resumed their downward march on Monday, doubling back on the biggest one-day gain in over two years, after Saudi Arabia's powerful oil minister said OPEC would not cut production at any price.
Gulf oil producers led by Saudi Arabia are expected to press the case on Thursday for not yet cutting OPEC output, despite calls from some members of the group to bolster sagging prices by removing surplus crude from the market.