The International Energy Agency said Friday, in its latest forecast that the global oil supply has eased due to the recent production cut measures.
According to the agency, the Organization of the Petroleum Exporting Countries and Russia mission to bring oil stocks down to a five-year average by ending the supply glut has worked.
“With just under half of global oil supply subject to restraint and oil demand growing steadily, the impact on stocks has been substantial,” the report said.
OPEC agreed in December to cut oil output by 1.8 million bpd until the end of 2018. The agreement was due to end in March 2018, having already been extended once.
The agency added that “it is not for us to declare on behalf of OPEC that it is mission accomplished.”
The price of oil has been caught between a supply agreement by OPEC and the rise in U.S. crude. The U.S. overtook Saudi Arabia as the biggest oil producer in January.
The agency kept its global outlook for 2018 unchanged at 1.5 million barrels per day (bpd). Non-OPEC supply was also unchanged and expected to grow to 1.8 million bpd.
However, the report noted that trade tariff tensions between the U.S. and China could prove a risk to the current outlook for demand.
After the report, Crude Oil WTI Futures was trading at a session high of $67.19 a barrel, while Brent crude futures, the benchmark for oil prices outside the U.S., was at $72.22 a barrel.
On Thursday, the Organization of the Petroleum Exporting Countries said in its monthly report that oil stocks in the developed world were only 43 million barrels above the latest five-year average. The Paris-based IEA put the figure at just 30 million barrels as of the end of February.
The IEA said that even though non-OPEC output was set to soar by 1.8 million barrels per day this year on higher U.S. production, it was not enough to meet global demand, expected to rise by 1.5 million bpd or around 1.5 percent.
With production declines in Venezuela and Africa, OPEC was producing 31.83 million bpd in March, below the call on its crude for the rest of the year at 32.5 million bpd.
“Our balances show that if OPEC production were constant this year, and if our outlooks for non-OPEC production and oil demand remain unchanged, in 2Q18-4Q18 global stocks could draw by about 0.6 million bpd,” the IEA said.
Mohammad Barkindo, OPEC Secretary-General told Reuters on Thursday OPEC and its allies were poised to extend the pact into 2019 even as a global glut of crude was set to evaporate by September.