According to industry watchers, production of oil has fallen by almost 1.4 million barrels of oil per day (bopd) from December levels. OPEC had pledged to reduce daily supply by 1.5 mmbopd, which came into effect on 1 January.

On the demand side, International Energy Agency said the demand for oil last year grew at the slowest rate since 1985, however, it expected an economic recovery in the US to increase American demand by almost three per cent this year to an average of 19.9 mmbopd.