Oil prices rose for a third day today as OPEC said the market was gradually tightening after years of oversupply, but the 2018 outlook was less certain.
Brent crude futures, the international benchmark for oil prices, were trading at $56.80 per barrel, up 19 cents. Brent closed 2% higher the previous day.
US West Texas Intermediate (WTI) crude futures were at $51.31 a barrel, up 39 cents from their last settlement. WTI also closed 2% higher yesterday.
The Organisation of the Petroleum Exporting Countries today forecast higher demand for its oil in 2018 and said its production-cutting deal with rival producers was clearing the glut after more than three years of excess.
"OPEC and key non-OPEC oil producers continue to successfully drain the oil market of excess barrels," the group said.
OPEC, along with other producers including Russia, agreed to cut output by 1.8 million barrels per day (bpd) up to March 2018 to balance the market.
Barclays had raised its price outlook for the fourth quarter of 2018 and the first quarter of 2017.
"We have finally shifted fundamentally from build mode to draw mode," Barclays said in a note.
Saudi Arabia trimmed crude supplies to its biggest buyers in Asia, sources told Reuters, a sign that it is meeting its cut commitment.
Bullish forecasts from the International Monetary Fund also supported prices.
The IMF projected global economic growth of 3.6% this year and 3.7% for 2018, an indication that fuel demand would rise.
The US is not participating in the supply cut, and its output has risen 10% this year to more than 9.5 million bpd.