Tightness in the Oil Market Will Win Out: Energy Aspects' Sen

A pump jack stands at dusk in the Permian Basin area in Texas U.S. Bloomberg  Angus Mordant

A pump jack stands at dusk in the Permian Basin area in Texas U.S. Bloomberg Angus Mordant

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.

Brent and WTI crude futures have risen by approximately 30% and 40% respectively since the start of the year.

However, global oil markets remain firm, amid Opec+ supply cuts, US sanctions on oil exporters Venezuela and Iran and increased fighting in Opec member Libya. OPEC has been saying the curbs must remain, but that stance is now softening.

"We tend to focus on Trump's reaction to gasoline prices, but the Russian government is also continuously anxious about the street discontent factor that comes with rising gasoline prices", Jakob said.

Opec+, which includes most Opec members along with a number of non-Opec producer-countries led by Russian Federation, is trying to keep 1.2 million barrels per day (Mmbpd) off the market through June.

Current oil demand stands around 100 million bpd.

"I expect an extension for a further period, but maybe there will be some adjustment", this source said.

The OPEC and partners such as Russian Federation decided earlier on a production limitation in order to support the prices.

Venezuela pumped 960,000 bpd in March, down nearly 500,000 bpd from February, OPEC said in a report on Wednesday.

The sun sets behind an oil pump outside Saint-Fiacre, near Paris, France March 28, 2019.

Oil prices fell yesterday, after rising to five-month highs earlier this week on the Organisation of Petroleum Exporting Countries (OPEC)-led production cuts and free-falling Venezuelan output.

At the last OPEC meeting in Vienna, the group's members agreed to slash output by 812,000 bpd, with Russian Federation and nine other non-OPEC allies committing to a cut of 383,000 bpd for the first six months of 2019.

It is expected that OPEC may consider raising oil output from July if disruptions continue and prices keep rallying.

But Putin, who's Russia's ultimate dealmaker, said he wasn't decided yet on how Moscow's cooperation with OPEC should go. "It all depends on where prices are by the end of May and June".

US crude oil production remained at a record 12.2 million barrels per day (bpd), making the United States the world's biggest oil producer ahead of Russian Federation and Saudi Arabia.

Russian Federation is also ready to boost supplies.

OPEC also revised down non-OPEC oil supply growth in 2019 by 60,000 bpd "due to extended maintenance in Kazakhstan, Brazil and Canada".