Crude Oil Price Forecast - Crude oil markets struggle on Friday

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

International Brent crude oil futures were at $71.01 per barrel at 0042 GMT, up 18 cents, or 0.3 percent, from their last close.

Despite the surge in U.S. supply and the economic concerns, global oil markets remain tight amid supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC), U.S. sanctions on oil exporters Iran and Venezuela, and escalating fighting in Libya.

The latest IEA monthly oil market report showed that the Venezuelan oil output plummets to 870,000 bpd on outages and sanctions, as cited by Reuters.

Crude futures rose again on Friday, heading for a sixth-straight week of gains, as threats of a wipeout in Libyan crude supply bolstered an already squeezed market.

Brent and WTI have risen by around 30 and 40 percent respectively since the start of the year.

That is down 9.4 percent from 10.23 million bpd in February as state-owned refiners began maintenance.

The International Energy Agency said on Thursday that Venezuelan crude production has dropped below 1 million bpd to 870,000 bpd due to us sanctions, and Iranian supply could fall further after May if Washington tightens its sanctions against Tehran, as many experts anticipate.

Current oil demand stands around 100 million bpd. "Iranian production was stable at 2.7 million barrels per day, (but) could take a further hit if the USA cuts import waivers in May", said Jefferies bank on Friday. Crude oil outlook remains neutral, however, due to upcoming seasonality effects that typically boosts oil prices in addition to uncertainty surrounding further OPEC supply cuts.

In March, OPEC crude oil production tumbled by 550,000 b/d with losses in Venezuela, together with lower output from Saudi Arabia and Iraq. Indicating that an ongoing price hike could prompt OPEC to promote a supply glut, an analyst at Price Future Group in Chicago, Phil Flynn said, "Now there is a suggestion that OPEC may surprise us and raise production pre-emptively if we get a price spike". The dollar index slipped to its lowest against the euro in more than two weeks, making crude cheaper for non-U.S. buyers.

The rig count fell for the past four months as independent exploration and production companies cut spending on new drilling to focus on earnings growth instead of increased output.

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