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Oil prices are higher following reports the Organization of Petroleum Exporting Countries' "shock and awe" campaign to cut production was gaining traction, but a conflicting federal report suggested gains could be short-lived  with the U.S. oil sector poised to flood the market with new supply.

West Texas intermediate crude oil jumped 1.85% Wednesday to $54.08 a barrel after a report by the International Energy Agency said that global supply dropped by 1.4 million barrels a day in January, falling to 99.7 million bpd, according to The Wall Street Journal.

OPEC led the charge, accounting for cuts of almost 1 million barrels a day and pushing production to its lowest point in four years, the Journal reported, with falling production in Venezuela, accelerated now by new U.S. sanctions, also contributing to the decline.

The production cuts began last month as OPEC and allies like Russia, a major oil producer, teamed up in a bid to boost prices and shift the balance of the global oil market back toward producers, according to the Journal.

OPEC members have gone beyond the cuts they had originally agreed to in a "shock and awe" campaign to boost global oil prices, an industry analyst told the newspaper.

"Oil prices climbed on Tuesday as the market digested the output cuts from several OPEC nations as well as improved expectations for economic growth following the possible avoidance of a U.S. government shutdown," Jim Cramer and Action Alerts PLUS analysts noted in a report.

However, a report by the federal Energy Information Administration contended the OPEC cuts will be offset to some extent by a rise in crude oil production in the United States.

The EIA has boosted its estimates for U.S. oil output this year, citing increased productivity in the shale oil sector, and in particular, the Permian Basin, as well more oil than expected is gushing out of wells in the Gulf of Mexico.

Jim Cramer and AAP analysts discussed the conflicting reports on the state of the global oil market in a conference call on Wednesday.

U.S. oil production will average 12.41 million barrels per day in 2019, rising to 13.2 million bpd in 2020, the EIA stated in a forecast released Tuesday.

Both the 2019 and 2020 numbers are 0.3 million barrels per day higher than previously estimated.

Ramping up U.S. oil production will mean lower-than-anticipated prices on the Brent crude index, the international standard. The price per barrel on the Brent index will average $62 in 2020, $3 lower than previously estimated, noted MT Newswires, which cited the EIA.