OPEC sees rivals' oil output rising as it over-delivers on cuts

On the flipside however, OPEC, via its monthly oil market report released on Wednesday evening, said Nigeria was still producing at an average 1.545 million barrels per day, according to secondary sources.

The government's Energy Information Administration (EIA) said on Tuesday that U.S. 2018 crude output would rise to 9.9-million barrels per day, from 9.22-million barrels per day in 2017.

Still, data showed an unexpected drop in overall USA crude inventories, which fell in the week by 2.2 million barrels as imports declined by 717,000 barrels a day.

Prices were boosted earlier on Wednesday following reports that Saudi Arabia has told officials from the Organization of the Petroleum Exporting Countries that it wants to extend an agreement to cut output for another six months when the group meets in May.

Brent crude LCOc1, the worldwide benchmark for oil, was down 33 cents from its previous close at $55.55 per barrel at 11:38 a.m. EDT (1538 GMT).

Oil headed for its highest settlement in a month as Russian Federation signaled it's weighing an extension to OPEC-led production cuts, offsetting concern rising USA production will exacerbate a global glut.

OPEC reduced its output to around 1.2 million barrels per day from the beginning of January and for six months - the first curb in eight years - to get rid of excess supply.

The increase is said to reflect growing demand from Asia, which is anticipated to lead oil demand growth.

Meanwhile, Kuwait oil chief Essam al-Marzouq fuelled expectations that OPEC would reveal further cuts in March compared to previous months, after he said he expected producers' level of compliance with the deal to cut global supply would "be higher than the previous couple of months".

Oil prices limped into the trading day early Tuesday after steady gains as investors took stock of the latest supply and demand trends. Despite a bigger than expected drop in U.S. crude oil inventories, oil prices fell from their five-week highs, reached last week after the United States launched a set of airstrikes against the Syrian government.

While speculation that the Organization of Petroleum Exporting Countries and its allies will extend their six-month pact aimed at eroding a global glut is helping boost prices, there's also concern that rising United States output will counter the reductions.

On the demand front, OPEC expects the world to need 96.32 million barrels daily, a growth rate of 1.27 million bpd.

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