U.S. President Donald Trump's withdrawal from the Paris agreement, the landmark 2015 global pact to fight climate change, drew condemnation from Washington's allies and many in the energy industry - and sparked fears that U.S. oil production could expand more rapidly than it is now.
"This could lead to a drilling free-for-all in the US and also see other signatories waver in their commitments", said Jeffrey Halley, senior market analyst, OANDA.
The Organization of Petroleum Exporting Countries extended an agreement to cut crude supplies by 1.2 million bpd for the first half of 2017 by nine months to March 2018.
Oil headed for its biggest weekly drop in four weeks as US supply data signaled that OPEC's efforts to re-balance oversupplied markets need more time.
Stakeholders in the oil and gas sector recently in Abuja, lauded the decision by the Organisation of Petroleum Exporting Countries (OPEC) to extend crude cuts till April 2018.
Oil prices fell to a three-week low yesterday on news that Libyan output was recovering from an oilfield technical issue.
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The concerns come amid continued uncertainty over whether the recent OPEC agreement to extend production cuts will actually manage to reduce global output.
The general trend among United States of America producers points to a need to boost growth forecasts amid anticipated production acceleration the second half of this year, said consultancy Energy Aspects.
OPEC and other producers, including Russian Federation, have agreed to restrict output by 1.8 million bpd to drain stockpiles that are close to record highs in many parts of the world.
US production increased, and the expectation is that ongoing activity in USA shale will continue to boost output, offsetting OPEC efforts. Eventually, though, shale growth won't be enough to keep up with increasing demand and declines elsewhere, and when that happens, we will likely see prices rise again. Total motor gasoline supplied (the agency's measure of consumption) averaged 9.6 million barrels a day for the past four weeks, down by 0.7% compared with the same period a year ago.
Higher productions from Nigeria and Libya have largely negated the oil curb compliance followed by other members of the oil cartel. US commercial crude inventories decreased by 6.4 million barrels last week, maintaining a total USA commercial crude inventory of 509.9 million barrels.
Reuters sources say Opec officials discussed deepening the cuts last week and could revisit the proposal.
Oil prices moved higher following the EIA inventories data on Thursday, but there was selling pressure above $49.00 p/b and prices retreated again late in the USA session. Distillate product supplied averaged 4.2 million barrels a day over the past four weeks, up by 3% compared with the same period previous year.