"Sentiment has been further hampered by the USA dollar finding support overnight following a late Friday sell-off", said Mike van Dulken and Henry Croft, analysts at Accendo Markets. On London's Intercontinental Exchange, global benchmark Brent for May delivery rose 0.20% to $56.01 a barrel, while on the New York Mercantile Exchange crude futures fell 0.24% to $53.20 a barrel.
While most analysts are wondering when Russian Federation will reach its gradual 300,000-bpd production cut as part of the deal with OPEC to reduce global supply, another non-OPEC producer, Azerbaijan, is boasting not only full compliance, but a strong overcompliance with the cuts. OPEC, Russia and others are due to agree on output policy in the next three months.
"It's like the Saudis are doing the whole thing themselves", said Tariq Zahir, managing member of Tyche Capital Partners.
And U.S. producers have responded quickly to higher prices.
"Signals we get from oil companies [both national and private] are not very encouraging".
Most supply growth is expected to come from the United States, where the IEA said shale, or light tight output (LTO), will grow by 1.4 million barrels per day by 2022 even if prices remain close to current levels $60 a barrel and the response from the production side could be stronger still if prices rise.
"As long as producers in the USA add more drilling rigs, shale production will continue in a sustained uptrend adding further pressure on OPEC to not only extend the accord beyond the original six months, but possibly cut even deeper", said Dominick Chirichella from the New York-based Energy Management Institute.
US crude inventories climbed to 520.2 million barrels in the week ended February 24, the highest in weekly data going back to 1982, according to the Energy Information Administration.
"And unless investments globally rebound sharply, a new period of price volatility looms on the horizon", he said.
Oil demand is set to overtake supply, according to a March 5 Goldman Sachs Group Inc. report.
OPEC is expected to increase production capacity to 37.85 million bpd in 2022 from 35.9 million bpd in 2016, while demand for the group's crude is expected to rise to 35.8 million bpd in 2022 from 32.2 million bpd a year ago.
Gasoline futures rose 1.92 cents, or 1.16 %, to $1.6723 a gallon - their second highest settlement value of the year. Longs slipped 3.9 percent from an all-time high, while shorts jumped 24 percent.