Carsten Fritsch, analyst at Commerzbank, noted that "In view of sharply falling US crude oil stocks and record-high compliance with the production cuts by OPEC [the Organization of the Petroleum Exporting Countries], market participants are convinced that the market is continuing to tighten".
A survey of analysts by commodity pricing group S&P Global Platts revealed expectations of a 3.5 million barrel draw on crude oil inventories in the United States, the world's leading economy.
Russian Federation produced an average of almost 11 million barrels per day in 2017, while Saudi Arabia produced about 10 million barrels.
Members of the Organization of the Petroleum Exporting Countries fear current price gains could prompt USA shale oil companies to flood the market.
Traders are watching the surplus on the five-year average in crude oil inventories for signs of balance.
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The West Texas Intermediate (WTI) price kept steady over 63 USA dollars per barrel following the EIA data release. The Organization of Petroleum Exporting Countries, with help from big producers like Russian Federation, are working to drain the surplus through managed production cuts, now in their second year.
The remarkable gains were driven by the American Petroleum Institute claiming that domestic oil inventories dropped by 11.2 million barrels last week; if this figure is confirmed by the Energy Information Administration (EIA) on Wednesday, it will be the largest draw for this time of year since 1999 and almost triple what had been estimated in a Bloomberg survey. Part of the reason is that demand for diesel, a similar fuel, is increasing.
"U.S. crude oil production is forecast to average 10.3 million b/d in 2018, which would mark the highest annual average production in USA history, surpassing the previous record of 9.6 million b/d set in 1970", the report said.
"No point in fighting momentum, but the risk of a sharp move lower has not gone away", he said.