Investing.com - Oil prices on Friday morning in Asia stayed close to three-year highs reached earlier this week as ongoing OPEC-led supply cuts gradually shrink excess supplies.
Crude Oil WTI Futures for May delivery were trading at $68.35 a barrel in Asia at 11:20PM ET (03:20 GMT), up 0.09%. Brent Oil Futures for June delivery, traded in London, were up 0.07% at $73.83 per barrel.
Meanwhile, Shanghai Crude Oil WTI Futures for September delivery were up 0.09% at 438.20 yuan ($69.75) per barrel.
A gradually tightening market combined with healthy demand has pushed up oil prices.
The Organization of the Petroleum Exporting Countries (OPEC), Russia and several other oil producers have been cutting output since January 2017 in an attempt to reduce the global oversupply and prop up prices. Results are closing in on the original target of the pact - reducing industrialized nations’ oil inventories to their five-year average.
The pact has been extended until the end of 2018 and OPEC will meet in June to review policy.
However, there is no indication yet that Saudi Arabia or its allies want the supply cut to end.
Over the past year, Saudi Arabia has emerged as OPEC’s leading supporter of measures to boost prices. The kingdom now wants even higher prices than Iran, once a keen OPEC price hawk.
Beyond OPEC’s supply restraint, oil prices have also been supported by an expectation that the U.S. will re-introduce sanctions on Iran. This could result in further supply reductions as Iran is OPEC’s third-largest producer.
Weighing on oil markets is rising U.S. production, which has jumped by a quarter since mid-2016 to 10.54 million barrels per day (bpd), making the U.S. the world’s second largest producer of crude oil behind only Russia, which pumps almost 11 million bpd. The U.S. is expected to surpass Russia by 2019.