Olivier Jakob, managing director of Switzerland-based consultant Petromatrix, said in an emailed report that USA oil production was poised for growth and Canada is back to where it was before Alberta wildfires in May idled about 1 million barrels per day in production. The survey also reported that Opec's output fell by over 1 million bpd in January to 32.27 million bpd between December and January.
But investors remain wary of rising output from countries outside the deal, including the USA, which could wipe out the gains made by OPEC's supply action.
At 6:17pm GMT, the Brent front month future contract for April delivery was down 1.58% or $0.88 to $51.94 per barrel, while the West Texas Intermediate (WTI) was 2.02% or $1.07 lower at $54.84 per barrel, as data published Baker Hughes pointed to yet another uptick in the number of U.S. and Canadian rigs.
However, the data aggregation and analysis firm also noted that the 10 Opec members obligated to reduce oil output under the landmark agreement, including Saudi Arabia, had achieved 91% of their required cuts in January, with their production falling 1.14 million bpd from October levels.
On Tuesday session, oil prices are still seeing mixed movements in the market since the commodity opened lower on Monday after losing its gains from last week.
The good thing for the oil market is that Opec nations are adhering to the agreed output cut. USA crude CLc1 was 96 cents lower at $52.05 after closing down 82 cents on Monday.
"There are a lot of longs in the market, and if we don't see prices rise those longs will get discouraged and exit the market as fast as they entered over the past few weeks", said Tariq Zahir, trader at Tyche Capital Advisors in NY.
Some think US gasoline demand is stalling.
Benchmark Brent crude LCOc1 was down 10 cents to reach $55.62 per barrel while U.S. crude CLc1 was also down by 10 cents to touch $53.01 a barrel, reported Reuters.
Gasoline inventory increased by almost 21 million barrels in the first 27 days of January, indicating stall in demand or a glut in the United States market.
"Tension between Tehran and Washington has risen since an Iranian missile test which prompted US President Donald Trump's administration last week to impose sanctions on individuals and entities".