Interruptions from Hurricane Harvey, dwindling OPEC production and seasonal maintenance caused output to come down by 720,000 barrels a day last month from July, to 97.7 million barrels a day, the International Energy Agency said Wednesday.
Refinery crude runs fell by 424,000 barrels per day, API data showed.
"Based on recent bets made by investors, expectations are that markets are tightening and that prices will rise, albeit very modestly", the IEA said in the monthly report.
Longer term, the United States should strengthen its energy security to address events, such as hurricanes, by potentially adding oil products to government-held inventories, the IEA said.
With ongoing rebalancing, the IEA raised its call on OPEC's oil by 0.1 million bpd for both 2017 and 2018.
Also ahead, the Organization of Petroleum Exporting Countries' monthly report to assess global supply and demand levels is due. According to the report, demand grew by 2.3 million barrels per day (mb/d), or 2.4 percent, in the second quarter of 2017, this has prompted the IEA to increase its growth estimate for the year to 1.6 million barrels per day.
The agreement on reducing oil production, which OPEC has concluded with 11 independent producing countries, including Russian Federation, is in effect until the end of March 2018.
OPEC's crude output fell in August for the first time in five months on renewed turmoil in Libya, with the cartel's production decreasing by 0.21 million bpd to 32.67 million bpd. Compliance levels in August hit 82 per cent compared with 75 per cent.
Kazakhstan exceeded the plan thrice, cutting production in August by 54 thousand barrels per day with a quota of 20 thousand.
Crude oil prices fell in Asia on Tuesday with industry estimates of US inventories expected to show a leap as stocks build from Gulf Coast refinery shutdowns in the wake of Hurricane Harvey.
"As far as Harvey is concerned, disruption to local oil markets in the US Gulf Coast is easing on a daily basis and its impact on global markets is likely to be relatively short-lived", said the agency, which advises the OECD on energy markets.
Global benchmark Brent crude futures, the benchmark for oil prices outside the USA, fell 0.32% to $53.67 a barrel.