Since 2016, OPEC and a number of other major oil prices like Russia have been in a concerted effort to cut 2% of the global crude supply in an attempt to diminish the global supply glut and stabilize crude prices. Analysts now project the oil market could move into a deficit in the second part of 2018 and 2019 of 0.5 million barrels and later 0.3 million barrels per day as demand begins to outpace supply.

Furthermore, market observers warned that geopolitical risks could also increase volatility in pricing. For instance, the growing tensions between the U.S. and North Korea over its nuclear program could weigh on consumer sentiment and oil consumption.

“Oil demand could suffer if the North Korean conflict were to flare up again,” analysts for Commerzbank said in a recent note. “After all, three of the world’s five largest oil import countries are to be found in the region: China, Japan and South Korea.”

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