As such, relief in the oil patch seems far-fetched. While the oil market has been so fixated on rising oil rig counts, the increase in uncompleted oil wells should have been raising some concern.
The oil cartel and USA shale producers began dialogue earlier in March this year.
The drop in USA inventories is expected to enable the market to rebalance. The previous record was set in 1970 at 9.6 million b/d. Whilst the older oil fields, dominated by traditional methods of crude extraction, are depleting rapidly, the surge in shale oil might fail to make up for the slowdown in traditional oil production.
In May, OPEC production rose by 366,000 barrels per day, thanks to Libya and Nigeria.
It may be time for OPEC and US shale producers to pump the brakes. A bigger number should be bullish for oil prices. Not only have their cuts in investments lowered their proven oil reserves and their new discoveries of oil, but a major ratings agency wants them to cut more. The cuts are aimed at shrinking global stockpiles and boosting oil prices.
WTI crude oil prices are gearing up for $41.8 on downside, its key support vicinity. Royal Dutch Shell (RDSA) gained 1.5%.
Crude inventories fell by 8.1 million barrels in the week to July 7 to 495.6 million, compared with analysts' expectations for a decrease of 2.9 million barrels.
The EIA expects demand for petroleum and other liquids to rise by 360,000 barrels a day, or 1.8 percent, next year.
Crude futures continued to move higher Wednesday, riding on optimism that US crude inventories likely shrank again last week.
The EIA's weekly storage update for the USA, the world's largest consumer, is considered as a leading indicator of the balance between supply and demand.
Nigeria and Libya were exempted from cuts agreed to by OPEC and other large producers in an effort to trim a global glut. Global oil demand is poised to increase to 99.2 mln bps by 2021, the EIA said, and to 109.4 mln bpd by 2040. Whopping 6.3 million barrels decline in the United States crude oil inventories as reported by the EIA on Thursday failed to lift the prices beyond an hour.
"We (OPEC) are fairly in consensus on our position on cuts", he said, adding that OPEC hoped oil prices would stabilize later this month.
The U.S. vaulting into the top ranks of exporters would have been unthinkable even a few years ago.
Nigeria has continued to maintain its position as the top producer of oil in Africa according to the Organisation of Petroleum Exporting Countries (OPEC) monthly report for the month of July.
He said that OPEC and the USA shale companies would "definitely" meet again at the end of the year.
PIRA estimates that American crude exports will grow to 2.25 million barrels a day by 2020, a four-fold increase from 2016.