On Monday, shortly before the Nymex settlement, a monthly report from the Energy Information Administration forecast a rise of 124,000 barrels a day in May to 5.193 million barrels a day for crude-oil production in seven major US shale-oil plays. They settled 53c lower at $52,65 a barrel. If they do, prices will likely continue their climb-giving the US, which isn't part of the pact, more incentive to boost its crude output, contributing to a global glut.
"The battle between the "sheiks and the shale oil producers" is far from decided. with all attempts by OPEC to achieve a lasting production deficit on the oil market being torpedoed by non-OPEC producers - first and foremost the US", analysts at Commerzbank wrote.
Due to the higher expectations from outside producers, OPEC trimmed forecast demand for its crude in 2017 to 32.22mbpd - 130,000 less than last month but more than current production, suggesting stocks will drop if output does not rise.
US crude oil production reached 9.24 million barrels per day (bpd), according to the latest Energy Information Administration data, making it the world's third-largest producer after Russian Federation and Saudi Arabia. Stockpiles at Cushing, Oklahoma, the delivery point for WTI and the biggest United States oil-storage hub, fell by 570,000 barrels last week, according to a Bloomberg survey. The oil market is on the road to re-balancing, Al-Falih told reporters at a conference in Riyadh.
USA drillers last week added rigs for a 13th straight week.
U.S. West Texas Intermediate (WTI) crude futures were down 14 cents at US$53.04 a barrel, after falling by as much as 55 cents earlier in the day.
"We should have a month of headline-driven trading in the run-up to the May 25 meeting", Gene McGillian, manager of market research for Tradition Energy in Stamford, Connecticut, said in a phone interview.
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The Paris-based IEA, which advises industrial nations on energy policy, said on Thursday supply and demand in the global oil market was close to matching after a fall in stockpiles in developed countries in March.
In November 2016, OPEC chose to cut its output by 1.8 million barrels for the first six months of this year to end the rising global oversupply.
China has turned net oil product exporter since June 2015, with the highest recorded net oil product exports at 2.85 million mt for November 2016.
Since mid-2014, the oil market has faced an excess of supply over demand, which has led to a sharp decline in oil prices.
Nigeria will revive oil production this summer as it completes maintenance and repairs, and expects fellow OPEC members to continue to cut their output in the second half of the year, Oil Minister Emmanuel Kachikwu said.
Analysts said they expected crude oil inventories to have fallen by around 1.5 million barrels last week.