The U.S. produced an average of about 9.3 million barrels of crude oil per day in June.
US oil futures topped $41 a barrel intraday, but reversed lower falling back below $40 as Baker Hughes (BHI) reported the USA oil rig count rose for the first time in 2016.
Since settling at an almost 13-year low of $26.21 a barrel on February 11, US oil prices have shown a wide rally, buoyed by expectations that low prices would force producers to curtail output and that the global glut of the past two years would begin to abate.
Buying in recent days has been fueled also by the Federal Reserve, which on Wednesday halved its forecast for USA interest rate hikes this year.
Meanwhile, U.S. oil is headed for a 5th consecutive week of rallies, while Brent is headed for a 4th weekly climb, the longest advance streak in around a year for both benchmarks.
"A dialogue among key producing countries to address oil output will at best yield a decision to freeze output, but not the much-needed reduction required to rebalance the market".
Could oil prices be ready for a move sharply higher after Brent crude's break above $40 per barrel to its firmest level for three months?
Official data Wednesday revealed that USA stockpiles of commercial crude grew by 1.3 million barrels last week, far lower than the 3.2-million build expected by markets.
This week’s increases mean that oil prices in general have soared more than 50 percent since the Organization of the Petroleum Exporting Countries (OPEC) bandied around the notion of a production freeze.
The statement, citing a global slowdown and market turmoil, sent the dollar plunging, which in turn makes oil cheaper for anyone holding other currencies.
"You have a weak dollar today and the reverse correlation with crude oil is going to rally crude", Mr. Yawger said.
Crude oil prices are helped by the sharp depreciation of the US Dollar, and the increasing optimism that oil producers will soon reach an agreement by next month to put a cap on their aggregate production.
"The fundamental outlook for oil prices still remains bearish", he said.
Whether Iran decides to participate or not, OPEC and non-OPEC producers including the top two exporters, Saudi Arabia and Russian Federation, will hold talks on April 17 in Qatar over a plan to freeze output, increasing the likelihood of the first global supply deal in 15 years.