Production in Libya, which along with Nigeria is exempt from output cuts, rebounded 30,000 barrels a day to 920,000 barrels in September as the Sharara field restarted after a halt of more than two weeks. Analysts responding to commodity group S&P Global Platts said they expected to see a draw on USA crude oil inventories of around 1.5 million barrels, while US gasoline inventories climb 1.5 million barrels.
The pact between OPEC, which is led de facto by Saudi Arabia, and other producers led by Russian Federation on cutting output by about 1.8 million bpd took effect in January this year. At APPEC, the mood at the evening parties this week was certainly far more bullish than in 2016.
Oil prices settled lower on Tuesday as investors took profits after big third-quarter gains.
After hitting over $58 per barrel, Brent crude oil, the global benchmark of the commodity, fell to around $56 p/b at the end of Monday's USA trading session. This is a flawless world for refining, Gary Ross, the founder of consultant PIRA Energy, said on the sidelines of the APPEC conference, held by S&P Global Platts.
With demand outpacing supply, crude and refined products inventories are shrinking. Distillate stockpiles, which include diesel and heating oil, fell by 2.6 million barrels, versus expectations for a 1.8-million-barrel drop. Supplies stored at sea are dwindling too, traders say.
Wednesday's decline came as data from the American Petroleum Institute late Tuesday showed that US crude supplies fell for a second week in a row, by 4.1 million barrels for the week ended September 29, but also indicated that gasoline stockpiles rose 4.2 million barrels, while inventories of distillates declined by 584,000.
"We are seeing a normalisation of global inventory, it's mostly falling, which is supporting prices", said Mr Burns.
Russian President Vladimir Putin said on Wednesday that the pledge between OPEC and other producers, including Russia, to cut oil output could be extended to the end of 2018, instead of expiring in March 2018.
"We have also reduced our UK National Balancing Point gas price assumptions due to our updated oil price assumptions and an expectation that global liquefied natural gas capacity additions will probably result in a supply surplus", it said.