China Jan-Feb crude oil output on par with record low

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This offered modest support to the Brent price, which has fallen by about 1 percent so far this week on concerns that coordinated supply cuts by OPEC and its partners might not be enough to offset the relentless rise in USA crude production.

On Monday, the EIA said production from major US shale formations should rise by 131,000 barrels per day in April vs. the previous month to an all-time high of 6.95 million bpd.

Oil prices rise on Wednesday after posting two days of declines at the start of the week.

Brent for May settlement added 30 cents to $64.94 a barrel on the London-based ICE Futures Europe exchange, and traded at a $3.78 premium to WTI for the same month.

Support came from a report that USA crude inventories are not rising as much as expected during the spring season now starting, implying healthy demand, and from strong China data. The total OECD commercial stocks dropped 206 million barrels compared to the same time one year ago, OPEC said.

Net U.S. crude imports fell last week by 407,000 barrels per day.

China reported a 7.2% year-on-year increase in industrial output in the first two months of the year, roundly beating expectations. A broader market slump initially drove prices lower, while surging American production and increasing inventories remain a challenge.

"The ever-expanding USA supply continues to pose significant downside risk to oil prices", said Stephen Innes, head of trading for Asia/Pacific at futures brokerage OANDA.

Estimates by the EIA show global supplies will exceed 100 million bpd for the first time in the second quarter of 2018, while demand will only break through that level in the third quarter, implying a slightly oversupplied market.

United States production is expected to rise above 11 million bpd by late 2018, taking the top spot from Russian Federation, according to the International Energy Agency (IEA).

Cartel members' production went down 77,000 bpd from January to February, the report said, citing secondary sources.

A multitude of factors were weighing on oil prices, but one factor stands out among the rest, and that's the steadfast climb of U.S. crude oil production, which for the week ending March 2 increased again, coming in at 10.369 million bpd-close to the 10.7 million bpd figure that the EIA suspects we will see in 2018. That's nearly a 1-million bpd rise in just a bit over two months.

That would be a reversal from a supply deficit in 2017 and early 2018.

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