"Now we're seeing reductions in spending on shorter cycle projects, in other words immediate drilling activity," Watson said. "Rig rates in the US are down almost 80%, we're seeing decline in rig rates around the world and we're starting to see the supply response that everyone has expected. So we're seeing the markets come back into better balance [but] it may take more time."

"The level of $45-50 (per barrel) is acceptable from the point of view of market balance: if prices go higher shale oil production could start to recover."

Oil-producing countries can come to an agreement capping crude production at January levels even if Iran doesn’t join the move to help shore up prices.

Oil at $35 a barrel is neither too high nor too low but just right to make shares of U.S. explorers worth buying, according to Goldman Sachs Group Inc.

The cumulative effect suggests that for U.S. growth over the next three years, there's no difference between oil at $30 or $70 per barrel. How the trade balance responds to swings in crude will dictate which path is more desirable.

State-run Saudi Arabian Oil Co. increased its official selling price for May Light, Medium and Heavy sales to U.S. buyers by 40 cents a barrel, the company said in an e-mailed statement Tuesday. Extra Light crude will sell at a premium of $2.60 a barrel to the regional benchmark, 75 cents higher than the differential in April. For the U.S., the benchmark is the Argus Sour Crude Index.

Front month U.S. West Texas Intermediate (WTI) crude futures were trading at $38.02 per barrel at 0653 GMT, up 76 cents, or 2 percent, from their last close. International Brent futures were up 60 cents at $40.03 a barrel.

Prices, which have swung between highs of about $42 a barrel and lows of about $27 this year, will continue to be volatile in the short term, Al Jaber said in an interview with Abu Dhabi dailies The National and Al Ittihad.

OPEC secondary sources put Iran's current output at 2.93 million barrels per day (bpd). It is working to regain market share, particularly in Europe, after the lifting of international sanctions in January. The sanctions had cut crude exports from a peak of 2.5 million bpd before 2011 to just over 1 million bpd in recent years.

The world’s biggest oil exporter lost ground to rivals in nine out of 15 top markets between 2013 and 2015, including China, South Africa and the US, according to an analysis of customs data.

Brent oil prices dropped below $40/bbl on the London market on Mar. 29 after news reports about the restart of production from Khafji oil field, which had been closed since October 2014. Kuwait Gulf Oil Co. and Saudi Aramco Gulf Operations Co. jointly operate the 300,000-b/d field. No restart date was given.

Persistently low oil prices complicate the conduct of monetary policy, risking further inroads by unanchored inflation expectations. What is more, the current episode of historically low oil prices could ignite a variety of dislocations including corporate and sovereign defaults, dislocations that can feed back into already jittery financial markets. The possibility of such negative feedback loops makes demand support by the global community—along with a range of country-specific structural and financial-sector reforms—all the more urgent.

Europe and Russia are each trying to diversify—the first by getting more gas suppliers, and the second by trying to sell more gas to China and East Asia.

Neil Atkinson, head of the IEA’s Oil Industry and Markets Division, said in Singapore on Wednesday. About $300 billion is needed to sustain the current level of production, and nations including the U.S., Canada, Brazil, and Mexico are facing difficulty in keeping up investments, he said.

“We furnish 20 percent of China’s crude oil imports – about one million barrels a day. But there’s a significant gap in what we are doing now, and what we can offer,” Nasser said. “Our investments in China’s entire oil value chain – integrating supply, refining, chemicals, lubes, distribution and marketing – don’t match our supply.”