Data this week, meanwhile, showed USA crude oil production declined about 100,000 barrels per day for the biggest decline so far this year.
Crude oil prices have risen to $48.77 per barrel, showing $3.23 in excess of Nigeria's 2017 budget reference of $44.50 per barrel.
Birch added the recent rally in crude oil prices "may be a bit premature", adding US oil production is balanced by modest consumption growth and some members of the Organization of Petroleum Exporting Countries are churning out more oil even as other members work to correct the supply overhang with managed declines.
The story is not much changed from late last week, when prices dropped sharply: traders are responding to news of rising output from key producers and signs of global oil reserves continuing to grow.
The research house said compliance among OPEC members to cut 1.2 million bpd of oil from the market is strong so far but pressure is beginning to build up to sustain the discipline up to June 2018.
Growth in US production has been hampering efforts led by the Organization of the Petroleum Exporting Countries to reduce global oil inventories.
WTI Crude Oil (Light Sweet) price at NYMEХ Stock Exchange up by 1.84% to $46.04 per barrel. The subsequent rush to create long positions, in turn, helped the shale oil companies to hedge their produce at a favorable price.
Crude oil prices were pulled out of the long retraction that began in mid June in response to a slight decline in US crude oil production levels.
The decline is presumably caused by the agreement on production cuts extended by OPEC and Russian Federation in May and proves that not only Saudi Arabian crude export is affected by the deal.
These profits mean that the market is slightly high since the beginning of this week, after it remained low during most days of the last month. Venezuela reported to OPEC - where Venezuela is a founding member - that its production was 2.235 million barrels per day in March 2017. Motor gasoline was down 900,000 barrels to 241 million barrels. "HE Alexander Novak and HE Khalid A. Al-Falih both alluded to these historic decisions and how they took us one step closer to our goal of re-establishing a balanced market". "I don't think it's going to last, but the momentum at the moment is with the bulls", PVM Oil Associates strategist Tamas Varga said.
While the oil industry is having a far better year than in 2016, when the price of a barrel of oil hit $26, down from 2014 highs of $107, the same issue remains that first caused those prices to fall: The world is awash in barrels, and more keep coming onto the market. According to the EIA, 682 million barrels are held as of today.
A forecast released this month by the Canadian Association of Petroleum Producers sees the country's output increasing by 270,000 barrels a day in 2017 and another 320,000 b/d next year. Of course, that is entirely due to the decline of oil prices. In addition, United States production grew... over the same time period.