Russian Federation cuts oil production by 160000 barrels per day by mid-March

Opec and its allies are almost three months into a deal to reduce production in a bid to eliminate a global oil-inventory surplus after three years of glut

Opec and its allies are almost three months into a deal to reduce production in a bid to eliminate a global oil-inventory surplus after three years of glut

Russia, the largest of the 11 outside producers working with OPEC, has not publicly said whether it supports extending the supply cut, but is wary about the revival of US shale output due to higher oil prices. Russian Federation and other non-OPEC producers agreed to cut half as much.

Brent crude is set to drop for a fifth day, its biggest losing streak since a six-day slump that ended on November 4.

However, most of the investors that had expected oil prices to book decent gains in response to the output cuts would have had their hopes dashed in the last couple of weeks. It continues to be flooded with oil.

Saudi Arabia has set a near-impossible target to end the current round of OPEC oil-production cuts, indicating that a policy rollover into the second half of the year is a near certainty.

Josh Stevenson, an analyst who provides market analysis on Lionexo observes that "he fact that there is yet to be a marked "correction" in the supply-demand dynamics of oil made it hard for OPEC's cut to make much of a positive difference in triggering an increase in oil prices". The rebound in United States drilling will slow down before output can make up for Opec's reductions, according to Morgan Stanley, which sees Brent reaching $62.50 a barrel by the end of the year.

An upgrade in non-OPEC supply prospects also led analysts at J.P. Morgan to cut their 2017 and 2018 price forecasts to $55.75 and $55.50 for Brent and to $53.75 and $53.50 for WTI, respectively.

Oil prices edged up on Friday as a drawdown in USA crude inventory eased concerns about a global supply glut.

On the New York Mercantile Exchange, the West Texas Intermediate crude April contract fell 0.69% to $48.97 a barrel.

Saudi Energy Minister Khalid Al-Falih added to the tension last week when he said Saudi Arabia, the world's largest exporter of oil, will not "bear the burden of free riders". A growing number of OPEC officials believe it may take longer than six months to reduce stocks.

Still, OPEC and its partners are "fully committed" to curbing supply, Al-Falih said.

OPEC and non-OPEC suppliers are fighting hard to maintain their market share in this market where new oil is flowing from as far as the USA and Europe.

Crude prices fell further in Asia on Monday as the supply response of USA shale drillers to coordinated output cuts by OPEC and key producers and headlines from the G-20 meeting of finance ministers in Germany at the weekend dampening sentiment.

Meanwhile, oil producers in the USA will be nervously waiting and watching.

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