Oil prices

Oil prices are nearing $31 a barrel due to prospects of production cuts by Organization of the Petroleum Exporting Countries (OPEC) and rival producers tackling the problem of oversupply globally.

Brent crude LCOc1 increased 55 cents at $30.87 a barrel, while the US crude CLc1 rose 55 cents higher at $28.49, Reuters reported.

Iran’s Oil Minister Bijan Zangeneh said that the country is ready to negotiate with Saudi Arabia and other OPEC members over the prevailing conditions in oil markets globally.

Speaking at the IP Week conference in London, Rosneft chief executive Igor Sechin suggested each of major oil producers to cut production by one million barrels per day (bpd).

Traders from OPEC are however doubtful that any deal between the group and rival producers takes place, which could support the prices.

In June 2014, oil price collapsed from above $100 to $27.10 in January 2016.

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This is primarily due to oversupply pressure and a change of policy introduced by OPEC in 2014 to protect their market share.

Data released by the American Petroleum Institute (API) revealed that crude inventories increased by 2.4 million barrels in the week ending 5 February.

Image: Brent crude LCOc1 increased 55 cents at $30.87 a barrel. Photo: courtesy of Victor Habbick/ FreeDigitalPhotos.net.