Nigeria has lost its Africa's top oil producer position to Angola for the second time in two years, as the country's crude oil production fell by 67,000 barrels per day last month, latest data from the Organisation of Petroleum Exporting Countries ( OPEC) have shown.
Crude oil declined Monday, but consolidated well off session lows as investors evaluated signs of higher US output.
Benchmark Brent crude futures fell 48.8 cents at $55.40 as of 0315 GMT.
Despite the hit that many investors in the United States shale oil industry have taken in recent years as a result of various producers going bust, a total of around $19.8 billion was invested in the sector by private equity funds during the first quarter of 2017, according to the financial data provider Preqin.
OPEC countries, according to the IEA report, have had impressive levels of compliance with the deal to cut production output.
May output was expected to rise by 123 000 barrels per day to 5,19-million barrels per day, according to the US Energy Information Administration's drilling productivity report. "The soft US CPI (consumer price index) on Friday will ease yields further, also undermining the reflationist markets such as oil and precious metals", he said.
Members of the group are scheduled to meet on 25 May to discuss the possible extension to the output cut deal beyond June.
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Meanwhile, oilfield services firm Barker Hughes reported its weekly US rig count rose by 11 to 683.
As actual, physical oil reserves are drawn down throughout the remainder of the year, the evidence of rebalancing will become more apparent, says the agency.
West Texas Intermediate for May delivery fell 41 cents to $52.77 a barrel at 12:15 p.m. on the New York Mercantile Exchange. Chief Executive Officer Amin Nasser said the global oil market is moving closer to balance despite the US shale boom.
"U.S. shale oil producers, particularly in the Permian basin, seem well convinced that they can make money at current prices and we're in no position to argue", Timothy Evans, a Citi Futures analyst said in a recent note.
The market has been oversupplied for three years, prompting members of the Opec and some non-Opec producers to agree to cut output in the first six months of 2017 to rein in the glut. While a production cut by OPEC can lead to a supply deficit in the second half of the year, the sustained addition of oil rigs will put a cap on oil prices as USA oil production rises. "The amount of crude not being processed at the Riyadh refinery is reflected in the oil stockpiles in February as they increased from January".
So of course, while tensions in the Middle East or (heaven forbid) the Korean peninsula would clearly be reflected in near-term oil prices, the main driver that will be a consistent factor over time is the level of global demand.