"There are so many uncertainties surrounding the oil market that it makes it virtually impossible to predict developments for the rest of the week let alone for months or a year ahead", Tamas Varga, senior analyst at PVM Oil Associates, said in a research note published Thursday. Demand for OPEC crude in 2018 averaged 31.35 million bpd.
After a production glut led to prices dropping past year, OPEC members and allies including Russian Federation agreed in December to trim production.
OPEC's largest producer Saudi Arabia saw its output dropping to its lowest in over two years, boosting compliance with supply cuts to 153%, according to the IEA's Oil Market Report.
The recent downward revision to the 2019 global growth forecasts made by the International Monetary Fund combined with the renewed US-EU trade worries continue to cast doubt on the global economic growth and its impact on the oil demand.
Meanwhile, money managers raised their net long U.S. crude futures and options positions in the week to April 9, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.
OPEC states have complied by 153% with their pledged production cuts made under the so-called Vienna Agreement, the IEA said.
The combined supply cuts have helped to drive a 32 percent rally in crude prices this year to almost $72 a barrel, prompting U.S. President Donald Trump to call on OPEC to ease its market-supporting efforts.
"This turnaround in supply has contributed to a dramatic increase in prices, with Brent crude rising from $50 a barrel at the end of December, to more than $70 a barrel today".
Global benchmark Brent settled at $71.07 a barrel, up 18 cents or 0.3 per cent compared to previous figures, Addustor newspaper reported yesterday. U.S. West Texas Intermediate (WTI) crude futures ended the session up 31 cents, or 0.5 percent, at $63.89 a barrel.
Prices plunged on Thursday as traders continued to react to rising USA inventories.
The prospective initiative from OPEC was reportedly encouraged by the recent rally in prices and because extending its production cuts with Russian Federation and other allies could over-tighten the market (the cartel agreed with allies to withhold 1.2 million barrels per day (bpd) of crude since the start of 2019, and its output fell 550,000 bpd in March to 30.1 million bpd).