Output has been helped by the 25% rise in oil prices over the past year, along with improvements in efficiency and technology.
Despite this, oil markets remain relatively weak.
Net U.S. crude imports fell last week by 407,000 barrels per day.
West Texas Intermediate for April delivery was 32 cents lower at $60.39/bbl at 11:31 a.m. on the New York Mercantile Exchange.
Estimates by the EIA show global supplies will exceed 100 million bpd for the first time in the second quarter of 2018.
Tillerson's replacement Mike Pompeo, now the Central Intelligence Agency director, is known as something of an Iran hawk, RBC chief commodities strategist Helima Croft said Tuesday.
Rising US output, as well as seasonally low demand, mean US crude inventories rose by 1.2 million barrels in the week to 9 March to 428 million barrels, the American Petroleum Institute (API) said on Tuesday. He will likely push for the USA to exit the nuclear deal with the Persian Gulf nation in May, and could advocate for tougher sanctions on Venezuela, which might boost oil prices, she said. Analysts had forecast a smaller decline of 1.519 million barrels.
If sanctions are reinstated, Iran's oil exports could drop by 250 000 to 500 000 barrels a day by the end of this year, FGE said in a note. "Of course, the reason is because we had some unexpectedly large draws in distillates and gasoline that, when added together, are two times bigger than the crude build", said Bob Yawger, director of energy futures at Mizuho. Gasoline stocks fell by 6.3 million barrels, compared with analysts' expectations in a Reuters poll for a 1.2 million-barrel drop.
In terms of the five-year average of OECD commercial stocks that OPEC is officially targeting in the production cut deal, preliminary data for January showed that total OECD commercial stocks were 50 million barrels above the latest five-year average, with crude stocks at a surplus of 74 million barrels and product stocks at a deficit of 24 million barrels to the seasonal norm.
Traders of crude oil cargoes face a dilemma.
China's factory output and investment growth unexpectedly accelerated in the first two months of the year amid robust global demand.
"The current healthy momentum in the global economy, together with the efforts undertaken by the OPEC and non-OPEC oil producing countries.is supporting the rebalancing of the oil market fundamentals", the report said.
US oil production is expected to top 11 million bpd later this year.