Oil Prices Back From 3-Year High After Trump's Tweet, Opec Report

Oil pump jack

Oil pump jack

London Brent crude was down 24 cents, or 0.3%, at $71.78, and is up about 7% for the week.

Meanwhile China's March crude oil imports climbed month on month to the second-highest level on record, calculated on a daily basis.

The price of oil was also supported by a drop in production by the Organisation of the Petroleum Exporting Countries (Opec) and Russian Federation, as they continued to comply with a 2016 deal that was reached in Vienna after prices crashed amid a global glut, the IEA said in the report.

The IEA said that scheduled maintenance, unplanned declines and tighter supply discipline cut OPEC crude oil production by 200,000 b/d in March to 31.83 million b/d. It is not for us to declare on behalf of the Vienna agreement countries that it is "mission accomplished", but if our outlook is accurate, it certainly looks very much like it.

OPEC's monthly report said global crude supply in March was up 180,000 BPD, to average 98.15 MMBPD, with non-OPEC production increasing by 380,000 BPD. As a result, data released in the "next month or two" could show stockpiles have dropped below the five-year average, said the report.

Confirming estimates by S&P Global Platts, the IEA said a third of the March cuts came as a result of intentional reductions from Venezuela and Mexico, which have lost a combined 890,000 b/d versus the October 2016 baseline.

"Losses from Venezuela helped push OPEC crude output to the lowest level in almost three years and raised (the OPEC cut) compliance to an eye-popping 163%", the IEA said.

The U.S. overtook Saudi Arabia as the biggest oil producer in January.

" As we start the last day of the week, we feel that the geopolitical risks are not as high as feared three days ago", Petromatrix said in a note.

Despite this, supplies remain ample and analysts said this would weigh on prices eventually.

Crude oil demand will increase globally this year while non-OPEC supply is expected to rise more than expected over the next year, the Organization of the Petroleum Exporting Countries and Russian Federation stated in its monthly report released Thursday.

Thomas Pugh, a commodities economist at consultancy Capital Economics, said a global trade war ignited by USA and Chinese tariffs would hit global economic growth and be negative for oil demand.

First-quarter demand from non-OECD countries was revised downward by 260,000 barrels a day "due to weak Chinese data".

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