Investment bank RBC estimated that oil from the U.S. Gulf of Mexico port of Houston "can economically move anywhere globally when priced at a discount of $1.70 per barrel relative to the waterborne Brent benchmark".
Despite the OPEC-led curbs, oil remains in ample supply as USA crude production has risen by more than 2 million bpd over the past year, to a record 12 million bpd, and because demand growth is low due to a global economic slowdown and improving energy efficiency across industries.
Today, oil futures gained approximatley 2 percent after U.S. crude inventories unexpectedly plunged and as Saudi Arabia brushed aside the comments from U.S. President Donald Trump that seeks to keep the oil prices from rising.
U.S. West Texas Intermediate (WTI) crude oil futures were down 0.8 percent at $56.49 per barrel.
A Reuters poll showed analysts expect global fuel demand to slow this year amid a broad economic slowdown.
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The weakness is also being felt across the wider region.
"Crude imports into the U.S. fell 1.6-million barrels a day last week, to a two-decade low", ANZ bank said on Thursday. South Korea's exports contracted at their steepest pace in almost three years in February as demand from China cooled further. Among exempt producers, Venezuelan supply fell, while Iran managed to boost exports despite also being subject to USA sanctions.
OPEC, Russia and other non-members - an alliance known as OPEC+ - agreed to reduce supply by 1.2 million bpd. Venezuela is exempt from the cuts.
The biggest drop in supply came from Saudi Arabia, OPEC's biggest oil producer, which pumped 130,000 bpd less than in January, the survey showed.
The collapse in oil prices may have influenced the 60% of the Survey respondents who advocated that OPEC should return to their 2014 strategy of fighting for market share, rather than the current plan of curtailing supply in pursuit of higher prices. That total was down from 11.91 Mmbpd in November, Kallanish Energy reports.