The Organization of the Petroleum Exporting Countries and other producers including Russian Federation have agreed to cut output by nearly 1.8 million barrels per day (bpd) during the first half of the year to try to reduce a global fuel glut.
"Higher oil production from the United States, along with rising oil output from Canada and Brazil, is expected to curb upward pressure on global oil prices through the end of 2018", EIA Acting Administrator Howard Gruenspecht said in a statement, reports CNBC.
News of a possible extension of the OPEC cuts and reports that USA crude stockpiles have dropped by 5.2 million barrels last week slightly boosted worldwide oil prices.
US crude production has risen by over 10 percent since mid-2016 to 9.3 million bpd, close to the output of top producers Russian Federation and Saudi Arabia.
Moves in refined product inventories also impact crude oil (FENY) (XES) (RYE) (IEZ) prices.
Global benchmark Brent crude was up 40 cents at $49.13 a barrel by 9:00am GMT.
The report will add to a debate about the effectiveness of the supply cut pact, which is expected to be extended when producers meet later this month. U.S. West Texas Intermediate crude CLc1 was up 0.5%, at $46.11 a barrel. "Oil may have seen the worst of the selloff for now, as the market turns its attention to the OPEC meeting at the end of the month", said Jeffrey Halley, senior market analyst at futures brokerage OANDA in Singapore.
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Oil prices pared gains on Thursday after the release of the report to trade at less than $51 a barrel LCOc1 , below the $60 level that top OPEC producer Saudi Arabia would like to see.
Japan, the world's fourth biggest importer, consumes 7 million barrels roughly two days and Aramco had been keeping supplies to its major Asian customers previously.
"We are discussing different options and consider that an extension for a longer period will help to speed up the return of the markets to a healthier condition".
OPEC member Libya said production exceeded 800,000 barrels per day (bpd) for the first time since 2014 and could rise to 1.2 million bpd later this year.
On Thursday, non-members Turkmenistan and Equatorial Guinea said they would join the cuts, though they are smaller producers.
Brent and US light crude futures contracts closed on Tuesday at their second lowest levels since November 29, the day before OPEC announced it would cut output in the first half of 2017.
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