But betting that oil prices have hit a ceiling and liquidating bullish positions is a "dangerous" game, according to Goldman Sachs. West Texas Intermediate and international-benchmark Brent crude oil futures are inching higher early Thursday.
The strong crude import pace continued this year, and in March Chinese crude oil imports hit their second-highest level on record at that time, while refined fuel exports also jumped to an all-time high, up by 43 percent compared to March 2017. Demand will remain strong and concerns over economic growth will probably prove temporary, Goldman's analysts said.
The fact that oil traders constantly redirect oil cargoes around the globe explains why most analysts expect sanctions to reduce global oil supplies by less than 500,000 barrels a day.More news: Stan Lee files lawsuit against former business partner, claims forgery
On Wednesday, the U.S. Energy Information Administration reported that U.S. crude inventories dropped by 1.4 million barrels in the week to May 11, to 432.34 million barrels.
"Clearly the recent rise in oil prices is going to pose a problem for some central banks due to the temporary impact it will have on the inflation data, especially when you consider that in the past year, Brent crude prices are up more than 50 percent", Craig Erlam, senior market analyst at Oanda trading group, told AFP. The Organization of Petroleum Exporting Countries and its allies have also finally succeeded in clearing a global glut, the IEA said.
"OPEC and Russian Federation have been implementing their policies efficiently", Pouyanne said, referring to the Organisation of the Petroleum Exporting Countries' efforts to clamp down on supply.
Trump on 8 May announced the United States decision to withdraw from what he views as a "defective" pact, noting that the sanctions to be re-imposed are targeted at critical sectors of Iran's economy, such as energy, petrochemical and financial sectors.More news: EU's Donald Tusk takes aim at Donald Trump over Iran, trade tariffs
Further supporting prices, Royal Dutch Shell said it was halting crude exports from a major Nigerian pipeline.
Traders are also saying that United States production is ready to overtake Russian Federation production.
"The import and export situation in reality has still not freed up but maybe we can see something now the long-awaited decision has been revealed", said the source in Asia. As the dollar strengthens, investors can retreat from dollar-denominated commodities like oil. This is a sign that there are sellers in the market.
"The potential double supply shortfall represented by Iran and Venezuela could present a major challenge for producers to fend off sharp price rises and fill the gap, not just in terms of the number of barrels but also in terms of oil quality", the IEA said.More news: Battlefield V to be revealed next week