The Organisation of Petroleum Exporting Countries (Opec) said it tightened its crude taps to cut nearly 800,000 barrels a day from its oil exports in January after vowing to drain excess oil from the oversupplied market.
Previous pacts by OPEC and its partners including Russian Federation, often called OPEC+, to cut back production have been marked by initial low compliance rates by certain countries.
The EIA reduced its forecasts for both Brent and West Texas Intermediate oil benchmarks by $3 a barrel for 2020.
OPEC, Russia and other non-OPEC producers, an alliance known as OPEC+, agreed in December to reduce supply by 1.2 million bpd from January 1 to prevent excess supply building up. The EIA, however, added a note of caution that USA production would be capping oil price gains.
However, rising USA oil production, fighting near Libya's main oilfield, sanctions on Venezuela and suspense over whether Washington will grant more waivers to import Iranian oil leave markets unsure about broader supply.
Compliance by non-OPEC participants was only 25 percent, however, it said.
Soaring output is putting the US on course to become a net exporter of crude oil and petroleum products next year.
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Refineries are built to handle a certain quality of crude, and those which process so-called heavy crude from Venezuela, Canada or the Middle East can not be easily converted to treat the light shale oil that is now being produced in greater quantities in the United States.
US sanctions on Iran and Venezuela, together with OPEC's output cuts, have therefore removed mostly medium and heavy oils from the market, leaving lighter grades relatively unaffected. "This is because, in terms of crude oil quantity, markets may be able to adjust after initial logistical dislocations", the group added.
The American Petroleum Institute (API) reported a smaller-than-expected draw of 998,000 barrels during the week-ending February 8.
Gasoline inventories for the same period rose 746,000 barrels.
Venezuela was once a major oil exporter to the United States, but shipments have fallen from 1.4 million bpd in 1998 to around 500,000 bpd in 2018 ("Petroleum supply monthly", EIA, Jan 2019).
Should US-China talks succeed, the US bank said oil markets would "switch attention from macro concerns impacting future demand growth to physical tightness and geopolitical risks impacting immediate supply". In the meantime, the markets seem well supported with buyers just waiting for any signs of increased demand.