Investing.com - Crude oil prices settled at nearly three-and-a-half year highs as the Joint Ministerial Monitoring Committee confirmed OPEC and its allies compliance with the deal to curb production rose to its highest ever, further stoking expectations for market rebalancing later this year.
On the New York Mercantile Exchange crude futures for May delivery rose 9 cents to settle at $68.38 a barrel, while on London's Intercontinental Exchange, Brent rose 0.22% to trade at $73.94 a barrel.
Crude oil prices settled higher, shrugging off earlier weakness which followed a tweet from U.S. President Donald Trump, in which he suggested that OPEC was keeping oil prices artificially high, insisting that it would not be accepted.
A jump in the number of oil rigs operating in the U.S. to the highest level in three years, pointing to an expansion in U.S. output, meanwhile, had a subdued impact on oil prices in the wake of continued optimism on oil prices.
The combination of strong momentum in developed markets and accelerating emerging market growth will combine to keep oil demand growth above consensus expectations, Goldman Sachs (NYSE:GS) said.
Goldman Sachs forecasts 2018 year-on-year oil demand growth at 1.85 million barrels per day, and Brent rising to $80 a barrel between the second and fourth quarter of the year.
Sentiment on oil prices were also boosted by confirmation of deeper OPEC-led production cuts after the Joint Ministerial Monitoring Committee confirmed that compliance is at its highest ever.
In November 2016, OPEC and other producers, including Russia agreed to cut output by 1.8 million barrels per day (bpd) to slash global inventories to the five year-average. The OPEC-led deal was renewed last year through 2018.
OPEC will meet in June to decide whether to extend the production-cut agreement despite expectations the glut in global supplies have shrunk to levels just above the oil cartel's target.
The production-cut agreement deal led to a sharp fall in excess crude supplies, which stood at just 12 million barrels above the five-year average in March, Reuters reported Thursday, citing a source familiar with the matter.