Analysts believe that Wednesday's price rebound will be short lived, given the Energy Information Administration on Tuesday boosted its US oil-production forecasts.
In 2018 average output is expected to reach 1.94 million barrels per day in Q1, 1.91 million barrels per day in Q2, 1.94 million barrels per day in Q3 and 1.99 million barrels per day in Q4. While the producers have largely complied with the production quotas, oil prices have struggled to gain momentum as USA shale producers have started to ramp up production in response to the OPEC-led cuts.
US West Texas Intermediate (WTI) crude futures were at $47.57 per barrel, up 24 cents, or 0.5 per cent from the last settlement.
Global benchmark Brent crude, according to Reuters news agency, settled up $1.49 a barrel, or 3 per cent, to $50.22 a barrel.
Saudi Arabia's oil minister Khalid al-Falih said on Monday that he expected the output deal to be extended to the end of the year or possibly longer.More news: 'Mamma Mia!' film sequel gets July 2018 release date
While US oil inventories fell, the country's crude oil production continued to rise, jumping above 9.3-million barrels a day last week, in what is now a more than 10% increase since its mid-2016 trough.
But after Brent prices fell back below $50 a barrel last week, analysts said producers felt forced to act.
The Organisation of Petroleum Exporting Countries (OPEC) has called on USA shale oil drillers to cut output for the prosperity of global economy.
The United States, Canada and Brazil were not among countries who agreed to cut supply, but analysts warned that growth in those regions could continue to undermine efforts to lift prices.
OPEC and other top producers will meet in Vienna on May 25 to discuss the possibility of cuts.More news: Oil prices climb on hopes output cuts will be extended
Oil is now changing hands near $50 again and it seemed that OPEC is likely losing its grip to influence prices as a new wave of new supply is striking the market from Texas to Libya.
Crude futures rose on the data after enduring weeks of pressure over worries that a deal between OPEC and non-OPEC producers to reduce supply was not having the desired effect.
"With the pick-up seen in drilling activities, as well as increased cash flows, USA tight crude output is expected to rise rapidly and increase by 0.6 mb/d in 2017".
Due to the higher supply expected from outside producers, OPEC trimmed forecast demand for its crude in 2017 to 31.92 million bpd, down 300,000 bpd from the previous forecast and not far from current production.More news: United Fresh Issues Statement On NAFTA Renegotiation
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