USA oil production increased by 37,000 bbl last week to 9.55 MMbpd, the EIA said Wednesday.
The November Brent crude futures contract was up $1.51, or 2.5 per cent, at $58.37 a barrel, its highest since July, 2015.
The Opec producer is shipping a combined 2.6 million barrels a day of crude and the ultra-light oil known as condensate, and expects to export more at 2017-end.
The increase in demand will likely boost overall crude consumption by 1.6 to 1.7 million bpd this year, Janet Kong, BP's chief executive, supply and trading, Eastern Hemisphere, told the Singapore conference on Tuesday. In spite of analyst warnings, oil indexes remained stable, suggesting that market has already factored in the prolonged consequences of Hurricane Harvey and Irma on oil dynamics in the United States. WTI hit 7-month high yesterday at the close of trade, at $52.22.
Backwardation is a market condition in which it is more attractive to sell oil immediately than store it, indicating tighter supplies. Saldanha Bay is one of the world's largest crude storage facilities, with the capacity to hold 45 million barrels. That followed Tuesday's drop of 1%.
What's taken many in the industry by surprise is strong demand for distillates such as diesel and jet fuel.
Crude has risen sharply in the last two-and-a-half weeks as traders anticipated renewed demand from USA refiners who were resuming operations after shutdowns due to Hurricane Harvey.
"According to our trade flows research, exports of Kurdish crude have ramped up in the last few months, reaching multi-year highs of 520,000 bpd in August", said Shakil Begg, a market analyst at Thomson Reuters.
Strong fuel demand was compounded by damage caused by Harvey, which hit the U.S. Gulf Coast in August and knocked out nearly a quarter of the country's refineries, resulting in large-scale fuel stock draws and increased imports.
Mr. Matashi added that NPDC also carried out some intervention activities which led to the peak production of approximately 10,000 bpd in OML 65 in June, 2017.
Oil futures on Tuesday fell by 0.7% on expectations USA data would show a fourth consecutive weekly rise in domestic crude inventories. The rig count is an indicator of future US shale oil production.
At an Opec meeting on Friday, several countries said output curbs were having the desired impact on the market and price.
In the wake of the above, traders brushed off news that the Organisation for Petroleum Exporting Countries had decided on 22 September not to extend - for the time being - a previous output cut deal beyond March 2018.