Without any of those reforms, Saudi Arabia’s financial troubles would continue to intensify.

The Paris-based agency said global oil stocks will experience a “dramatic reduction” in the second half of the year, but also warned that they will continue to increase in the first half of the year as Iran ramps up its production, adding to the nearly two years of oversupply.

The July crude oil contract on the New York Mercantile Exchange gained $1.66 to $47.01/bbl.The Brent crude contract for July on London’s ICE jumped $2.08 to $47.60/bbl. The August contract climbed $2.02 to $48.03/bbl.

Saudi Arabia is going through one of the most difficult periods in its modern history. Oil prices have dropped from a July 2014 high of $115 per barrel to less than $30 per barrel in January this year. The country is surrounded by failed states: Iraq, Libya, Yemen, Syria and, arguably, Lebanon. It has a demographic bulge of ambitious, but exceedingly frustrated, young men and women whose expectations differ dramatically from those of their parents. And it faces an emboldened Iran eager to interfere in the affairs of Arab countries, and with the financial wherewithal to do so, via proxy armed militia.

U.S. Rig Count is down 9 rigs from last week to 406, with oil rigs down 10 to 318, gas rigs up 1 to 87, and miscellaneous rigs unchanged at 1. Canadian Rig Count is up 7 rigs from last week to 43, with oil rigs up 5 to 16, gas rigs up 2 to 26, and miscellaneous rigs unchanged at 1.

Brent crude oil prices are forecast to average $41/b in 2016 and $51/b in 2017.

Rising incomes in China, India, and other emerging Asia economies are a key driver of the global energy outlook. Developing Asia accounts for more than half of the projected increase in global energy use through 2040. This increase will have a profound effect on the development of world energy markets. Clean energy technologies play an important role in the outlook, with renewables expected to be the fastest-growing energy source.

After jumping more than 2% as the markets opened with Asian trading Sunday night, both major contracts fell as reports emerged that the threat from the fires was diminishing, at least for the moment.

The June crude oil contract on the New York Mercantile Exchange climbed 34¢ to settle at $44.66/bbl, and the July contract gained 41¢ to $45.32/bbl. The NYMEX natural gas contract for June gained 2.5¢ to $2.10/MMbtu. The Henry Hub price was $1.84/MMbtu, down 20¢.

Light, sweet crude prices for June delivery varied widely on the New York market during Apr. 29 trading, closing at $45.92/bbl after swinging from a daily high of $46.78 and a low of $45.24.

Saudi Arabia, the world’s largest crude exporter, has raised June oil prices to Asia by the most in 14 months, in a hopeful sign that demand from the region is on the up.

U.S. Rig Count is down 5 rigs from last week to 415, with oil rigs down 4 to 328, gas rigs down 1 to 86, and miscellaneous rigs unchanged at 1. Canadian Rig Count is down 1 rig from last week to 36, with oil rigs up 1 to 11, gas rigs down 2 to 24, and miscellaneous rigs unchanged at 1.

“We still believe sustained front-month WTI at $45 to $50 will be self limiting, as U.S. shale-producer spending and drilling would stabilize and perhaps recover.”

The rout in crude prices is snowballing into one of the biggest avalanches in the history of corporate America, with 59 oil and gas companies now bankrupt after this week's filings for creditor protection by Midstates Petroleum MPOY.PK and Ultra Petroleum UPL.NL.

The reality is that the Kremlin is always likely to be heavily involved in the Russian oil industry. That creates the concern that the proposals might be structured to try to achieve higher prices, which is not consistent with efficient price discovery.