Of course, the Organization of Petroleum Exporting Countries (OPEC) figures prominently in the equation. OPEC has already agreed to reduce output by 1.2 million barrels per day. After the non-OPEC producers’ cuts, total reduction now represents almost 2% of global supply.

However, as just one example, Iraq violated its production quota last month, underscoring the potential that some OPEC simply will not abide by new production guidelines.

“Traders are more and more confident that the oil market will experience tighter conditions as we move into the second quarter, a bet that is reflected in both the time spreads and the exceptional buildup in bullish positions on crude oil,” according to OilPrice.

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