IEA points to USA shale oil growth

"We expect that we will be able to affect the entire market, I can't say exactly when we will start, but we believe that the agreement shall be in effect for the entire year 2018", he said.

By Friday, crude oil prices had wiped out all of the gains made so far in the year.

Oil stockpiles in developed nations fell the most in more than six years in December as supply cuts by the Organization of Petroleum Exporting Countries and Russian Federation took effect.

As crude begins to recover after its worst decline in two years, it seems like a decisive moment to cash in on the decline of the global oil inventory precipitated by OPEC's supply-cut pact. As the surplus shrunk dramatically, the success of OPEC's agreement to reduce overall production may be close at hand.

OPEC's plan may be paying off, with targets being met, and oil prices on the rise.

A second wave of USA shale oil production, now a major exporter, means trade patterns are shifting to, not from, the Middle East, the IEA said.

Novak said any decision about a gradual exit from the deal would be taken once global oil reserves had fallen back to their five-year average. Still, they acknowledge that oil demand grew at a rate of 1.6 million bpd in 2017, so they expect a demand drop even though global growth is stronger than it was previous year.

All of the indicators that point to a continuing surge from USA basins are in "perfect alignment", according to IEA.

Production is increasing against a backdrop of broader market uncertainty.

Oil prices are about 40% lower. The US has emerged as a major producer, and the changes in law permitting US crude exports will have an impact on trade patterns as well as on the relative share of the big players in the major markets.

"We've been under's all been a function of the IEA report", said Bob Yawger, director of energy futures at Mizuho. On the agenda the situation in the oil market. IP Week is recognized as one of the major worldwide oil and gas events, where senior leaders, policymakers and academics gather to share, learn and shape the future direction of the industry.

"European refineries are running at very high rates since December so there is plenty of supply in the region while the weather has been warmer than usual, which led to weaker demand".

The American Petroleum Institute, an industry group, said late Tuesday that its own data for the week showed a 3.9-million-barrel increase in crude supplies, a 4.6-million-barrel rise in gasoline stocks and a 1.1-million-barrel increase in distillate inventories, according to a market participant. "If so, most producers will be happy, but if not, history might be repeating itself".

Vanessa Coleman