Oil benchmarks shrugged off overnight declines on Wednesday (10 May), after a new report recorded a decline in US inventories, but sentiment in favour of rising non-Opec production continues to neuter a possible price boost from an Opec output cut extension.

At 5:33pm BST, the Brent front month futures contract was up 3.18% or $1.55 to $50.28 per barrel, while the West Texas Intermediate (WTI) was up 3.53% or $1.62 to $47.50 per barrel, after the American Petroleum Institute said overnight that US crude supplies shrank by 5.79 million barrels last week.

On Monday, both Saudi and Russian governments came out in favour of extending Opec and non-Opec production cuts beyond June. However, Opec's problem stems from rising non-Opec, especially US shale production, where efficiency savings and technology are seen helping marginal producers.

Meanwhile oil majors such as Shell, Chevron, Total SA and BP are reducing capital spending in 2017 but spending more efficiently.

David Brinley, general counsel at Shell, says the industry was learning to do more with less courtesy, of efficiency savings and improved drilling technology.

"Technology has enabled a lowering of lifting costs, and certainly this will continue. I can only speak for us [Shell]. It's crucial for us to keep going down that path," Brinley told delegates at the Baker & McKenzie Oil & Gas Institute in Houston, Texas, USA.

IBTimes UK columnist and Baker & McKenzie partner Mona Dajani says it is almost inevitable that the current price of oil is forcing people to think and act differently. "Upstream players are looking for cost efficiencies on a macro level realigning their corporate portfolio. Some companies are focussing more on specific geographies and technologies to ensure there is profitability even when there is a downturn."

Furthermore, there is aggressive strategic spending stateside, according to Wood Mackenzie. The research and consulting outfit recently told its clients that new spending will add 800,000 barrels per day (bpd) of US and Canadian crude in 2017, which equates to 44% of the reduction of 1.8 million bpd announced by Opec and non-Opec producers in December.

Unsurprisingly, market participants are continuing to shrug off persistent jawboning from oil ministers of some Opec countries, most notably Saudi Arabia, about extending the production cuts into the second half of 2017, and possibly the first quarter of 2018.

Fawad Razaqzada, market analyst at Forex.com, said speculators are probably questioning whether an extension to any deal by the Opec and some non-Opec countries would be agreed upon again given that this would translate into a loss of market share by those participating as US shale producers are ready to pounce on any opportunity.

"It appears therefore that sentiment is not as bullish as it was a few months ago, and it would probably require more than just talks to get people. Thus, for sentiment to turn decidedly bullish again, we will probably have to see a fundamental stimulus of some sort – specifically from the supply rather than just the demand side of the equation."