Oil traded between $30 and $32 this week as weaker fundamentals – increasing inventories and bad news concerning economic growth – was balanced off by reports that the Russians and the Saudis might get together to restrict oil output.  At the close Wednesday, New York futures settled at $32.30 and London at $33.10. The markets rose on Wednesday after a new report, this time from Moscow, saying that the Saudis had asked for a meeting to discuss oil output. Moscow has longed maintained that it has no intention of cutting production, partly due to the technical difficulties involved in cutting and increasing production in a cold climate.  A Russian government spokesman said on Wednesday that while the government was frequently in contact with other countries about the oil markets it is too early to talk about any coordinated action to cut production. Stronger oil prices this week have been helped by a weaker dollar and the Federal Reserve decision to delay more interest rate increases for a while.
The Saudis, of course, have no intention of cutting production by themselves so that Iran can regain its former market share. In order for any production cutting agreement to work, there would have to be cuts by all or most of the major exporting countries, including Russia, Iran, Iraq, and the Gulf Arab states.  Given the current size of world stocks and the pace at which they are increasing, it would require a large production cut to bring markets back into balance and whittle down the surplus.  While $30 oil is taking a toll on the economies of all the exporters, there is a general fear that rising prices would simply encourage US shale oil producers to increase drilling again as they did during the price jump last summer. 
The weekly stocks’ report showed US crude and gasoline inventories increasing by 8.4 million and 3.5 million barrels respectively, but colder weather lowering the distillate inventory by 4.1 million barrels and the propane inventory by 6.2 million barrels. The EIA says that US domestic crude production fell by only 14,000 b/d last week to 9.2 million b/d.
Low oil prices have led to $14 billion in losses for independent oil explorers last year.  Major US shale oil companies such as Hess, Continental Resources, and Noble Energy announced major cutbacks in capital spending in the coming year. The cuts were steeper than analysts had expected.  Halliburton oil services company reported a 9 percent drop in revenue, year over year, in the fourth quarter. The company reported a loss of $28 million in the fourth quarter as compared to a $901 million profit in the last quarter of 2014.
Thanks to heavy Russian bombing and other support, Syrian forces are pushing back the rebels that have been threatening western Syria. While the gains are putting the Assad government in a stronger position in what is left of the country, it is now doubtful that the opposition is willing come to any peace conference while they are being blown to pieces by the Russian air force.
The Iraqi Kurds are talking about holding a referendum later this year to decide whether they should seek independence from Iraq now that they have their oil production going pretty well. This will be highly controversial in the region as it opens the possibility of a wider Kurdish state which could include parts of Syria, Turkey and Iran. This would obviously be opposed vehemently in Damascus, Ankara and Tehran.
China’s economy and stock markets are still having troubles. A new inquiry into the National Bureau of Statistics has again raised the issue of whether China’s economic growth is anywhere near the claimed 7 percent. Many outside observers are saying that 3-4 percent is more realistic given that electricity consumption did not grow last year.