Oil prices drop amid growing number of United States drilling rigs

The Saudis increased output in February by 263,000 barrels per day to 10 million bpd, after in January making a larger cut than required by an OPEC accord. According to direct communication, rather than continue its cuts, the country actually increased production between January and February, from 9.748 million to 10.011 million bpd.

Oil prices recovered modestly from three-month lows on Tuesday before the release of the latest United States inventory figures and despite few clear signs that Opec will extend supply curbs beyond June. Production also increase by 56,000 barrels a day to 9.088 million barrels.

But, because some members have accused each other of lying about output levels in the past, OPEC also publishes numbers based on independent, or “secondary” sources, deduced from granular tracking of cargo movements and other data.

Pouring cold water on hopes building on the OPEC output cut deal and the expected stabilization in the oil patch, USA crude production is marching ahead.

A pumpjack brings oil to the surface in the Monterey Shale, California, U.S. April 29, 2013.

OPEC production dropped by about 140,000 barrels a day in February while USA production rose by almost 90,000 barrels a day.

Almarzooq conceded that reducing a 280 million barrel inventory “within one or two months isn’t easy, but I am certain and fully confident that the commitment of all the countries with this agreement will bear fruit in the next few months”.

Erasing the entire OPEC production cut surge.

“The speculative community is heavily stacked to the bullish side, buoyed by OPEC’s renewed willingness to correct market oversupply”. But rapid advances in technology have seen in the U.S. unconventional oil sector emerge much more resilient to lower oil prices than anyone expected.

The supply-cut deal has so far resulted in a surprisingly high OPEC compliance of more than 90%, thanks to the cartel’s leader and biggest producer, Saudi Arabia, which has been cutting deeper than pledged.

Brent futures had yet to be traded yet after settling down 43 cents at $50.92 on Tuesday, the lowest finish since November.

“The drama is all about US inventory build up which led people to think the production deal is advantageous for USA oil shale producers to turn the taps back on”, said Phin Ziebell, an economist with National Australia Bank.