Both U.S. and global benchmark oil prices have risen above the psychologically significant $50 per barrel level and seemingly settled there, for the time being. 

WTI crude contracts for February delivery were up 2% to about $53.30 per barrel Thursday morning, and Brent crude contracts for March delivery also climbed 2% to $56.21 a barrel as the U.S. dollar fell and reports of increased Chinese demand emerged.

But the initial movement above $50 was thanks to a production cut by members of the Organization of the Petroleum Exporting Countries and some non-members like Russia, and while many expect some of these global producers to cheat their quotas, positive sentiment over the cut has largely held up. 

Still, oil prices are far from the $60 per barrel mark many U.S. producers were likely hoping for in 2017, and a new report coming out of the U.S. Energy Information Administration suggests that price will continue to elude traders through 2018. 

In the near-term that could be discouraging news for U.S. E&Ps who are set to be top producers this year, like EOG Resources (EOG) - Get Reportand Diamondback Energy (FANG) - Get Report, and for international oil majors like ExxonMobil (XOM) - Get Report and Chevron(CVX) - Get Report

The EIA said Thursday, Jan. 12, that it expects global benchmark Brent crude oil prices to average $53 per barrel in 2017 and $56 per barrel in 2018, while average West Texas Intermediate light sweet crude prices should come in $1 per barrel lower than Brent in both years. 

Meanwhile, oil inventories remain high -- increasing to the tune of 4.1 million barrels this week -- and U.S. production is seemingly rebounding quickly with 10 consecutive weeks of rig additions reported by oilfield services provider Baker Hughes (BHI)

There also continues to be the issue of drilled but uncompleted wells, or DUCs, which are thought to remain at record highs. If data suggests OPEC members are staying true to production cap agreements in the coming months, a spike in oil prices would not be surprising.

Higher prices would give further confidence in tapping these DUCs to cash-starved U.S. producers, whose lenders are likely looking for these players to increase production programs in 2017 after sweeping operating cost cuts between 2015 and 2016. 

So while strong demand and OPEC's recent agreement is currently putting upward pressure on crude oil prices, the EIA forecasts that increases in global production should provide ample downward pressure on prices and mitigate the potential for significant crude oil price increases through 2018. 

Oil and gas analysts at Seaport Global Securities also suspect ramping production and the continuing supply-demand imbalance to eventually overtake positive OPEC-driven sentiment. 

"We have WTI Crude +1.2% to $52.85, despite U.S. production on a path to have [year-over-year] growth by this April and refiners churning like the dickens," SGS wrote in an early Thursday morning note. "The trend is your fiend 'till it's not but we would urge caution as the VIX won't stay below 12 for perpetuity and eventually equilibrium will overrule the OPEC jawboning."

We'll see whether the bulls or the bears win out in 2017, as it could have a major impact on what plays out in the following year. If history is any indication, there likely won't be another OPEC cut to prop up oil prices in 2017 if current global production builds too quickly in response to the current cut. 

EIA forecasts flat Brent crude prices over the course of 2017 as U.S. tight oil production responds to rising oil prices in late 2016. But the administration sees a gradual rise for the global benchmark price in 2018, beginning the year at $54 per barrel in January and ending the year at $59 per barrel in December. 

Meanwhile, U.S. crude oil production will climb from 8.9 million barrels per day in 2016 to 9 million barrels per day in 2017 and 9.3 million barrels per day in 2018.