For this week, it is the oversupply indicated by the historical high inventory level of oil that push the oil price back almost touched $37
Concern over growing oil stocks was triggered by U.S. Department of Energy data Wednesday showing U.S. crude supplies climbed by 9.4 million barrels last week, three times as high as the consensus estimate of analysts surveyed by The Wall Street Journal. U.S. production remained above 9 million barrels a day.
The oil markets rallied more than 50% since reaching multiyear nadirs in early February, as bearish traders closed out so-called short sales betting on further declines in the market, and bullish investors grew optimistic that the low prices would finally force producers to begin curtailing output. But the decline in U.S. production has been minimal, and stockpiles have swelled to all-time highs of 532 million barrels.
Meanwhile, major foreign state producers including Russia, Saudi Arabia and other members and nonmembers of the Organization of the Petroleum Exporting Countries have scheduled a meeting in Doha, Qatar April 17 to discuss freezing output at January levels. Still, that pace of output is near a record high, with most countries producing at their maximum ability, and would do little to curtail the oversupply estimated to be growing at a rate of 1 million to 2 million barrels a day.
Even though the negotiation is likely to happen in the next month, the whole picture of oil business will not get immediate change. How to balance the interests between different parties will be the biggest question because nobody wants to exit the business or earn less. Moreover, the demand is slowing down the speed of growth which is due to the week outlook for developing countries especially because of China. The oversupply would be a long-term problem which could got began to solve in next month.