That was buttressed by estimates from the U.S. Energy Information Administration, which late Tuesday issued its regular Short Term Energy Outlook report which said production would average a record 9.9 million barrels per day next year, an estimate that is around 680,000 barrels lower than the forecast it issued last month.
In May, OPEC production rose by 366,000 barrels per day, thanks to Libya and Nigeria.
The market will be closely watching OPEC's data on Wednesday, but it typically gives production numbers, not exports.
Despite a large weekly drop in crude inventories, banks continue to mark down oil prices.
Gasoline demand tends to increase in the northern hemisphere summer as USA drivers take to the road and this has helped support prices in the short term. Within half an hour, oil had given back all but about 15 cents of its gain.
Coal: "Higher coal-fired generation and more exports are expected to be major contributors to an increase in USA coal production this year, with coal output in western states rising the most".More news: New Glacier White PS4 Pro Bundle Revealed - Comes with Destiny 2
More news: Centre girds up for safe Amarnath Yatra as ultras plan Burhan anniversary
More news: Kyle Edmund bids to join four other Britons in Wimbledon third round
A lot of analysts are looking at a positive future for the crude oil and the output cuts that were announced; the initial output cut expectation for last week was at 2.8 million barrels but it turns out that inventories fell by 8.1 million barrels per day. This fate looks shaky as USA shale producers are already pulling back and reports of investment capital for shale is drying up.
USA demand growth in 2017 is expected to be slightly lower than previously forecast at 310,000 barrels per day, compared with 320,000 in the June forecast. "The price of crude oil, which accounts for about half the retail price of gasoline, has declined in recent months on rising US crude oil production and high petroleum inventories".
A separate report from the Energy Information Administration (EIA) highlighted the mounting challenges to the United States energy sector, which are poised to produce significant consequences for the oil market next year.
European refineries increased their crude oil intake in June, but stocks of oil products, particularly diesel, slid, Euroilstock data showed on Tuesday.
Libya and Nigeria are both exempt from the output-restraint deal that has been observed by other Opec members and producers outside the group since January. Traders were looking for a modest draw of 2.99 million barrels. "Algeria's current crude production is 1.7 million barrels per day".
Against these doldrums, news of diminished USA output led to an oil rally in late June.
Still, decreased supply on its own won't likely correct the oil market imbalance as demand remains weak.