Inventories have been at all-time highs for the last few years, but Goldman Sachs sees a more modest build of around 6 million barrels this year where we've often seen nearly triple these numbers at this time of year.
The commodities research team at Goldman Sachs this week reiterated a base case the USA benchmark West Texas Intermediate price to $50 per barrel and spot prices of $55 per barrel in 3 months.
"We saw the biggest draw in (US) inventories for the year last week with stockpiles down more than five million barrels, and it looks like OPEC's production cut is finally biting", said Greg McKenna, chief market strategist at brokerage AxiTrader.
Brent crude hovered above $50 per barrel on Friday, as oil ministers indicated that the Organisation of Petroleum Exporting Countries (Opec) would extend the deal it reached in November to cut output.
OPEC and the non-OPEC producers also cutting output meet on May 25 and are expected to extend the supply cut at least into the second half of the year.
The head of oil analysis for the IEA, Neil Atkinson said it was starting to become clear "that if the objective of the OPEC cuts was to flip the market from surplus into deficit, that is now slowly beginning to happen".
"The [US crude] inventories turned the heads of market participants towards the more positive side of things", said Eugen Weinberg, Commerzbank head of commodities research. Saudi Arabia, the de-facto Opec leader, has said it expected cuts to be extended.
"Three months later (after the OPEC-led deal), we see the USA rig count double and it says this isn't the only driver in the market any more".
As U.S. crude dipped below US$46 per barrel on Tuesday, Citibank says the "market is too complacent on price recovery".
The cartel abandoned its traditional strategy of limiting supply to support prices between 2014 and 2016, stepping up production and causing a plunge in prices to under $30 per barrel as they sought to squeeze out higher cost U.S. shale producers.
"This 550 million barrel-plus inventory build of crude and products that started in 2014 is still very much there", Bake said.
Citi analysts argue that the overarching expectation in recent years that prices would soon top US$60 per barrel may have given producers a false sense of security. But the OPEC report confirmed the cartel´s concern about a recovery in United States oil output.
The "baseline expectation continues to call for an extension" production cut agreement between members of OPEC and some non-OPEC producers, including Russian Federation, "but the details of any arrangement can have significant price impact", said Robbie Fraser, commodity analyst at Schneider Electric.
The strategy pushed prices well below $30 per barrel and forced many US producers to scale back in 2015 and 2016.