So, is Venezuela just the starting point?
"We remain "overweight" on the sector based on oil prices stabilising".
He blamed the lingering low crude oil prices to increased aggressive shale oil production by the US, although he noted that Nigeria and Libya were now being shielded from the pressures due to the exemption from output cut policy granted the duo by OPEC last January.
The minister added: "Over the last one and a half months, we've basically began to recover some of our assets that were vandalised and we've been getting a lot more cooperation from the militants that they are letting us continue to try and grow those barrels".
Consumers paying less at the gas pump due to low oil prices also implies more money in their pockets to spend on other items. This has led to a surge in the supply of crude oil.
The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, stated in Abuja yesterday that though Nigeria is recovering her oil production, the recovery is still not at the level she can tolerate reduction in the 1.8 million barrels per day granted her in May.
Meanwhile, the oil production in America has also soared up leading to low import by the nation.
The six secondary sources used by OPEC are the International Energy Agency, oil-pricing agencies Platts and Argus, the U.S. Energy Information Administration (EIA), consultancy Cambridge Energy Research Associates (CERA) and industry newsletter Petroleum Intelligence Weekly (PIW).
"There is substantial agreement that US fracking activity has moved too far and too fast, growing USA production at an uneconomic pace", wrote Bauer School of Business economist Bill Gilmer last month. That may take a while as the logistical issues of bringing drilled but uncompleted wells back on line will not give us the amount of oil production that the market has been expecting. That is down 1.2% from a year ago.
De-facto leader of OPEC, Saudi Arab is the worst hit due to the restrictions on production as it has to cut about 40 percent of the cuts pledged by OPEC. Its current output is around 1.7 million barrels a day, excluding condensates, Kachikwu said. Attempts to curb U.S. shale out of the market have had muted effects though it has somewhat rescued oil prices from falling.
A jump in output in Nigeria and Libya, where output had been limited by conflict, has weighed on oil prices.
Expansions in the petrochemical industries in the USA and China would also increase the global need for oil.
Opec said its oil output in June rose above the demand forecast, led by gains in Libya and Nigeria, two members exempt from the cut aimed at eliminating excess supply.