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Crude oil prices almost touched an eight-week high on Wednesday’s session following reports that the U.S. crude oil production has fallen down for the fourth consecutive week easing market concerns on the role of the United States in the global oil production and on how it has affected the efforts of the Organization of the Petroleum Exporting Countries in raising oil prices back up and avoiding global oversupply.

Crude Oil Price Movement

The U.S. West Texas Intermediate futures lost around 0.2% settling at $48.67 per barrel as refinery imports inched down while production rose sending most crude stocks in the U.S. down during the previous week according to data released by the Energy Information Administration last week. Along with this, falling oil prices have led most shale producers in the U.S. to come up with a decision to cut costs this year.

September WTI crude rallied by 1.8% on the New York Mercantile Exchange closing at $48.75 per barrel which was the highest close for an active contract since last May.

Despite moving lower on Thursday, oil prices are just a few inches away from touching a two-month high. Brent crude futures lost around 9 cents or 0.1% on Thursday but still remained at $50.88 per barrel from having previously gained around 1.5% during the last trading session.

Crude oil prices have gained around 6% this week alone as the market concerns gradually eased. From having previously traded in the $45-46 range during the beginning of the week, crude oil futures are now hovering at around $48.62.

More Producers Join Oil Cuts

Most of the support oil prices have hovered on during the past two weeks came from optimism over more oil producing countries pledging to hold more production cuts along with the continuous decline in U.S. crude production which has been an issue for both OPEC and non-OPEC producing countries during the past month.

U.S. crude stocks have fallen by at least 7.2 million barrels up till the week that ended last July 21.

Earlier this week, Saudi Arabia announced its plans to cut its overall crude exports by 1 million barrels per day to 6.6 million barrels per day next month. Kuwait has also announced that it has reached an agreement between its U.S. customers to cut contractual sales volumes for oil this year following announcement from Suhail Al Mazrouei, Minister of Energy for the United Arab Emirates that it would also reduce its crude shipments by 10% as early as September this year.

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However, declining compliance from participating countries is still an ongoing issue in the oil market as the weaker than expected production caps have offset most of the gains the oil prices have logged during the past couple of weeks.

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