The dramatic fall in the price of oil—which tanked as much as 60 percent from mid-June last year—has been due to weak demand, a strong dollar and booming U.S. oil production, according to the International Energy Agency (IEA). OPEC's reluctance to cut its output has also been seen as a key reason behind the fall. The group produces about 40 percent of the world's crude oil.  Some analysts have told CNBC that there is a global "game of chicken" being played out between the Gulf states and U.S. shale producers, over who can absorb the dip in prices and not cut back on production.  Saudi Arabia is the world's top exporter of oil and one of the biggest producers. The country is the main swing producer in the Gulf region and is able to cut and expand production more freely than some of its neighbors. Alison-Madueke told the FT on Monday that most OPEC countries - except the Arab bloc - were very uncomfortable with the current price of oil.  "Oil should remain a well-supplied market, with U.S. tight oil (shale oil) keeping OPEC in check," a team at Barclays, led by Keith Parker, said in a note on Tuesday morning.  The bank believes that lower oil prices are likely to persist with demand growth slowing due to energy efficiency and lower aggregate growth globally. However, on the plus side it also believes that growth will get a boost from lower prices and highlighted that the S&P 500 usually climbs 12 percent the year after an oil trough.
Any hopes of a sustained rally in the price of oil disappeared Tuesday as doubts were raised over an anticipated cut in production.