Analysts say that United States shale has been the largest single factor affecting the global energy business in the past decade and the shale boom played a major part in a historic price collapse in 2014.
Brent crude oil futures briefly broke back above $70 per barrel while West Texas Intermediate was trading around $64 per barrel.
OPEC and non-OPEC participants agreed on November 30, 2017, to extend the production cuts through the end of 2018 in an effort to reduce global oil inventories.
Experts say that the American Petroleum Institute (API) published another report, which says that the US crude oil inventories had shown the biggest drop in 18 years driven by really big demand. "Oil is acting like an internet stock and when it does that you know it's getting overcooked", said Walter Zimmerman, chief technical analyst for United-ICAP.
So far this year, the crude market has risen every day but two, helping increase the S&P 500 energy index about 6 percent over that span.
Data from the U.S. Commodity Futures Trading Commission shows the size of the short position for swap dealers has climbed into record territory, an indication of increased producer hedging.
Lower domestic crude oil prices made USA crude oil more competitive in worldwide markets and supported record US crude oil exports.
"It is remarkable to see that most market analysts believe that prices have rallied too far since consensus forecasts are significantly lower than the current spot prices", Hans van Cleef, senior energy economist at ABN Amro, said in a note. Prices were expected to cool off after jumping in mid December when the Forties pipeline system, which carries about 40 percent of total North Sea oil production, was shut down.
Based on data through October 2017, average US imports of crude oil increased by more than 103,000 b/d from the 2016 level to almost 8.0 million b/d in 2017, the highest level since 2012.
US crude oil production increased in 2017 by more than 384,000 barrels per day (b/d) to 9.2 million b/d, based on data through September and estimates from the December Short-Term Energy Outlook (STEO) for the remainder of 2017.
On January 10, oil prices were supported by API data.
He warned, meanwhile, that oil prices above $60 per barrel could be a spoiler as USA shale oil producers would take advantage of the rally by expanding their exploration and production work. Prices gained 1 percent to $63.57 on Wednesday, the highest close since December 2014.
And in addition, oil-burning power plants in New England which rarely get used all year have been running hard, contributing one-third to ISO New England's power generation fuel mix at times.
A stronger world economy and instability in some key oil-producing countries, particularly Iran, has also underpinned the price rises.