May output is set to rise by 123,000 barrels per day to 5.19 million bpd, according to the U.S. Energy Information Administration's drilling productivity report.
The oil market has been caught in a tug-of-war between forecasts that OPEC production will remain at reduced rates and bearish reports suggesting US production is rising, preserving a supply overhang in the market.
Investors should also look out for important data such as the weekly USA crude inventories figures, to gain further insights into the pace of the oil market rebalancing. The Opec and IEA monthly reports broadly provided a mixed picture but both emphasized better compliance to output cuts in March which is price supportive.
There's a long lag time between when rig counts would translate to actual production, though USA output is already above 9 million barrels per day. They rose 7 cents to $53.18 on Thursday. "Over this period, we have witnessed relative stability in the oil market".
Meanwhile, oilfield services firm Barker Hughes reported its weekly USA rig count rose by 11 to 683.
U.S. West Texas Intermediate crude futures CLc1 rose 1 cent to $52.66 a barrel.
"China's domestic oil production declines are worse than expected as mature fields like Daqing and Shengli continue to deteriorate", said Gordon Kwan, head of oil and gas research at Nomura.
Apple Self-Driving Car Project is Alive
But it does indicate that the company is developing the underlying software or hardware related to autonomous driving technology. Per Business Insider , Apple did not comment when asked if they are now "testing autonomous vehicles on public roads".
In addition, the possible Opec deal extension to extend the production output cut to beyond June 2017 would likely give support to oil prices.
The IEA said the global oil market is close to balance, after three years of excess supply, as oil stockpiles across The Organization for Economic Cooperation and Development (OECD) countries fell by 17.2 million barrels in March. Crude fell even as Saudi Arabia's Energy Minister Khalid Al-Falih said Monday that the oil market is on the road to re-balancing.
The U.S. drill rig count climbed to 683 last week, the highest since April 2015 and a 13th week of gains, Baker Hughes data showed on Friday. The agency's forecast for global demand is now at 1.3 million barrels per day, which comes after a surprisingly low appetite for oil from investors during the first quarter of the year.
Demand is sensitive to the price of oil; and the price of oil is in large part based on the volume of available, or excess, supply. OECD stocks, particularly products, drew by 0.8 million b/d in 4Q16, but we estimate that in 1Q17 they increased by 0.4 million b/d, mainly for crude oil and, in turn mainly in Europe and the US.
"Oil output will increase by 350,000 bpd this year, which will offset the 300,000 bpd loss in production", Kardor added.
Oil had rallied above $53 a barrel after some producers voiced support for prolonging a six-month supply-cut deal by the Organisation of Petroleum Exporting Countries and its allies.