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US crude production has jumped by over 10 percent since mid-2016 to 9.34 million bpd.

July WTI (West Texas Intermediate) crude oil (USO) (UCO) (XES) futures contracts trading in NYMEX fell 2.7% and closed at $48.32 per barrel on May 31, 2017.

Official data showed crude inventories in the United States, the world's top oil consumer, fell sharply last week as refining and exports surged to record highs. Monday, May 29, was Memorial Day holiday in the USA, which marks the official start of the summer driving demand season.

Meanwhile, the EIA added, distillate stockpiles, which include diesel and heating oil, rose by 394,000 barrels, versus expectations for a 755,000-barrel drop.

Abhishek Deshpande, Natixis SA's chief energy analyst, told Bloomberg that any impact on US crude stockpiles will be "extrapolated globally".

The declines were good news for oil markets, where prices have trended lower recently over concerns that rising US production is offsetting output cuts by OPEC and other major producers and keeping global markets awash in oil.

Industry data on USA oil inventories from the American Petroleum Institute (API) late on Wednesday had given prices an initial lift on Thursday morning.

Data from energy services company Baker Hughes showed on Friday that US drillers last week added rigs for the 20th week in a row, the longest such streak on record, implying that further gains in domestic production are ahead.

Libya's rising production and exports add to soaring US output, which is largely because of a more than 10 percent jump in shale oil drilling since the middle of previous year to more than 9.3 million bpd, close to top producers Saudi Arabia and Russian Federation.

"There are signs that the 1.8 million barrel cut is not really what the market is feeling because of rising production in the U.S., Libya, Nigeria and even the North Sea", said Gene McGillian, manager of market research at Tradition Energy in Stamford, Connecticut.

"OPEC's decision to prolong the cuts can only provide a strong price floor, but it is essentially useless in boosting prices because USA shale producers are still able to make profit and expand their operation at around $40", noted Gao. The United States is not participating in the self-imposed production cuts. While U.S. stockpiles have edged lower, rising American production and drilling is fanning concerns that OPEC's efforts to trim a global glut will be hampered.

Higher supply from Nigeria and Libya, OPEC members that are exempt from the production-cutting deal, offset improved compliance by others.

"That would favour the use and demand of fossil fuels", Chanes said.

"I see the little connection between oil markets and the Paris accord", Barratt said.