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

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

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.

In an interview with Bloomberg Television on Thursday, Saudi Energy Minister Khalid Al-Falih said that OPEC would extend the cuts after they expire in June if oil stockpiles were "still above the five-year average". Russian Federation and other non-OPEC producers agreed to cut half as much. The output cut has not done much to end the supply glut and global oil demand continues to be lower than the supply.

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". Separately, Falih told CNBC that efforts are underway to spur greater compliance among countries that have not cut as deeply as Saudi Arabia.

The US oil rig count rose by 14 to 631 rigs, the highest level since September 2015, according to data published on Friday by Baker Hughes Inc. U.S. West Texas Intermediate (WTI) crude futures were trading 71 cents lower at $48.07 a barrel.

The chart above shows how oil prices have fared since OPEC announced its supply cut a year ago until date.

"The recovery path of US tight oil is key to rebalancing the oil market over 2017, so is the compliance of the 11 non-OPEC countries that agreed to curb output", the IEA said.

"The American people aren't stupid", he said back in 2012 - when the price of oil was above $100 a barrel and gas was $3.50-plus a gallon at the pump.

Traders continue to worry about OPEC's ability to reduce the supply glut and extend the deal for another six months.

"It's too early to know whether everyone will agree to this", a source from a non-OPEC participant in the deal said, referring to prolonging the output curb. In his words, "my conversation with colleagues from OPEC and outside OPEC gives me a high degree of confidence that the impressive performance we have seen will improve".

Beyond OPEC, oil production rose 90,000 bpd in February, as increasing US output offset declines elsewhere. Hence, oil prices can start climbing up if OPEC can pull off another deal in which members agree to deepen or extend the production cuts.

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