USA hedge funds and money managers have already started lowering their bets on rising prices, with Commodity Futures Trading Commission data showing on Friday that investors had cut bullish bets on US crude for a second straight week.
Also helping push prices higher were unconfirmed reports that one of America's biggest oil refineries (owned by Exxon in Texas) had been forced to close part of a major production unit. This compares with no change in these inventories during the previous week - itself a cause for concern for the more pessimistic among market participants, as driving season is still in full bloom.
With its revisions, the IEA has cut the demand for oil in the current quarter by 800,000 barrels per day.
Gasoline demand fell 2.8% week-over-week and 240.0 Mbpd, or 2.5%, year-over-year. But oil production elsewhere has been rising, blunting the impact of output cuts by OPEC and its allies. Looking ahead, the short-term bias for oil remains positive, but the overall price action is set to remain choppy in the coming week as well.
However, according to the IEA, OPEC compliance slipped to 75 percent in July, from 77 percent in June.
Oil prices were in the green slightly Wednesday as the U.S. Energy Information Administration reported a 3.3 million barrel draw in domestic crude inventories. EIA forecasts show that USA shale oil production is expected to rise further and touch a record high in September.
"Increased crude oil imports and a drop in the refinery utilization rate open up the possibility of weakness in WTI". Rising output from shale fields isn't making things any easier. The API reported an unexpected 1.4 million barrel increase in gasoline stockpiles, however.
The report from the American Petroleum Institute, which came out after oil settled on Tuesday, showed crude inventories declined by 3.6 million barrels during the week ended August 18, as expected, while gasoline stocks unexpectedly rose by 1.4 million barrels.
RBC Capital Markets' Helima Croft, for instance, told CNBC that Venezuela's PDVSA is very likely to default on a US$3.5-billion debt payment due this October and November, which would severely affect the country's oil production, she said.