Oil prices rebounded on Monday after last week's seven-month lows, but were hemmed in by a relentless rise in United States supply and a surge in demand for short sale contracts that signal investors see potential for a price fall.
He went on to note that one reason are signs of USA shale production starting to slow, "particularly in the past couple of weeks" and that an inventory drop began sooner than expected.
OEPC and its 11 partners agreed in May to extend the cuts of 1.8 million barrels per day (bpd) until March next year.
Despite the cuts, which started in January, markets remain well supplied due to rising output elsewhere. OPEC member Iran was also allowed a small increase to recover market share lost under Western sanctions over its nuclear programme.
Oil prices have risen almost 2 per cent and hit a one-week high, boosted by a weaker dollar, short covering and expectations that crude inventories in the United States may decline for a third consecutive week.
"We think these market moves are consistent with the view that the oil price correction has been driven by excess supply rather than a drop in demand", said Joost van Leender, a portfolio manager on the team.
Crude oil may see further pain ahead after logging a five-week losing streak and tracking for its worst first-half percentage fall since the late 1990s, according to a Reuters estimate.
"Three days of price action has been interesting, it has been short covering", said Ric Spooner, chief market analyst at CMC Markets in Sydney. Prices rose 0.9% on Monday but are down nearly 10% this month, the worst June performance in nearly 30 years.
Brent crude futures settled up 29 cents, or 0.6 percent, at $45.83 a barrel. "I don't think OPEC is going to cut deeper, at least not for now".
Libya's oil production stands at about 935,000 barrels per day (bpd) this week after touching as high as 950,000 bpd last week, Libyan oil sources said. In the last week, there was an increase of 11 operating rigs in the USA, pushing the total number to 758, the highest since April 2015. "We're looking to make a run at the 40 dollar market".