Speaking on Nigeria's exemption from output cut, the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, noted that although Nigeria's production recovery efforts had made some appreciable progress from October, 2016, it was not yet "out of the woods". "The country extracted 733,000 barrels of crude oil and 52,700 tons of condensate in September", the MoE said in a statement.
Saudi Arabia, OPEC's biggest producer, boosted production by 60,000 barrels a day to 10.06 million barrels, while Gulf neighbor Kuwait lifted output by 50,000 barrels to 2.76 million barrels a day. It was the biggest third-quarter increase since 2004.The contract reached its highest in more than two years early last week, and posted its fifth consecutive weekly gain.
A recovery in US crude exports and falling European refining margins have sent prices of North Sea barrels tumbling, which may encourage traders to keep oil in storage and could undermine OPEC's efforts to drain inventories. As refiners enjoy strong margins, they have an incentive to buy more oil.
Just as important, global crude inventories have begun to decline.
This compares with an average analyst expectation of a 300,000-barrel draw, although the actual forecasts ranged from a build of 2.7 million barrels to a decline of 3 million barrels among 11 analysts polled by the Wall Street Journal. Supplies stored at sea are dwindling too, traders say. A stronger US currency reduces the appeal of dollar-denominated raw materials as an investment.
"We are seeing a normalisation of global inventory, it's mostly falling, which is supporting prices", said Mr Burns.
World oil prices decreased on Tuesday, as investors are still concerned about the oil surplus in the market after reports on the growth of OPEC production.
The rally was driven by mounting signs a three-year supply glut is easing, helped by a production cut deal by global producers led by the Organization of the Petroleum Exporting Countries.
"Compliance with the OPEC production cuts was over 100 percent in August (meaning members produced less than their quotas, on average) and US oil inventories have been declining for several months now", said William O'Loughlin, investment analyst at Australia's Rivkin Securities.