Despite this, many analysts are warning that the recent oil price rally, which has lifted crude by around 14 percent since early December, may be about to run out of steam.
“We reckon that the upside is now limited for oil prices … U.S. oil producers will ramp up production in the coming months … U.S. shale oil output will increase by a good 111,000 barrels per day (bpd) next month to 10 million bpd, and … will rise to about 11 million bpd by the end of next year. This would put the U.S. on par with Saudi Arabia and Russia’s output,” Razaqzada said.
What’s more, the API data showed a well supplied fuel product market, which could mean lower crude demand going forward.
U.S. refinery crude runs fell by 420,000 bpd and refined product stocks rose, implying a well supplied market.
Gasoline stocks rose by 1.8 million barrels while distillate fuels stockpiles, which include diesel and heating oil, climbed by 609,000 barrels,the API data showed.
Official U.S. oil inventory and production data is due on Thursday from the Energy Information Administration (EIA).
Source : CNBC