Oil steady as expected output curbs balance U.S. supply


However, this bullishness may not achieve much, amid doubts that everyone is on board with extending the OPEC and Russia's production cut agreement until the end of 2018.

Tuesday's and Wednesday's falls mean that Brent is now down by nearly 5 percent since hitting 2015 highs a week ago, ending a more than 40-percent rise between July and early November.

USA crude imports rose last week by 261,000 barrels per day.

Despite this, analysts said prices were relatively well supported due to efforts led by oil cartel Opec to withhold oil production in order to tighten the market and prop up prices. In particular, crude oil production in the Permian basin will average 9.4 million barrels per day the latter half of 2017 - 340,000 barrels per day more than in the first half.

"The oil market faces a hard challenge in 1Q18 with supply expected to exceed demand by 600,000 bpd followed by another, smaller, surplus of 200,000 bpd in 2Q18", the agency said.

Global oil demand growth is likely to have slowed to 1.3 million bpd in the third quarter of this year, in part because of the impact of hurricanes Harvey and Irma in August and September on United States consumption. EIA data confirming a surge in crude oil stockpiles could send markets deeper into negative territory. On the supply side, rising US output also pressured prices.

"This is why, absent any geopolitical premium, we may not have seen a "new normal" for oil prices", IEA concluded.

US oil production C-OUT-T-EIA has already increased by more than 14 percent since mid-2016 to 9.62 million bpd.

"Even after some modest reductions to growth, non-OPEC production will follow this year's 700,000-bpd growth with 1.4 million bpd of additional production in 2018 and next year's demand growth will struggle to match this", the IEA said.

The deal is due to expire in March 2018, but Opec will meet on November 30 to discuss policy, and it is expected to agree an extension of the cuts.

In Abu Dhabi on Monday, the UAE Minister of Energy and Industry Suhail bin Mohammed Faraj Faris Al Mazrouei, said that oil producers were expected to unanimously extend a production cut accord later this month, but its duration was still under discussion.