However, US trade policy is also driving global market unease, OPEC added, citing the potential trade war with China, tariffs on steel and aluminium, the breakaway from the Iran nuclear deal, and prolonged North American Free Trade Agreement (NAFTA) talks.
Meanwhile, output from third-largest Opec producer Iran is uncertain on renewed United States sanctions.
Still, crude prices were near more than three-year-highs reached last week as markets expect Iran's oil exports to fall significantly once USA sanctions bite later this year.
But Saudi Arabia could still keep supply constrained as it needs higher oil prices to fund its government. Investors are watching whether OPEC and its allies such as Russian Federation intend to end output cuts and increase production if renewed American measures restrict the Persian Gulf state's exports.
In April, Chinese crude oil imports set a new record-at 9.6 million bpd they beat the previous daily record of 9.57 million bpd from January this year. "This time around, we expect much less of an impact".
Saudi Arabia, the largest crude oil exporter in the world, has said it will help fill the gap if USA sanctions on Iranian oil importers creates shortages, but it may not be willing to act alone. Current OPEC compliance with production cut plans remains above their historical average, and it usually takes between two to three quarters for inventories to normalize after the cuts. The production agreement with Russian Federation and non-OPEC members is slated to run through year-end but it could potentially end earlier, be modified or even extended beyond beyond 2018.
The tightening market has all but eliminated a global supply overhang which depressed crude prices between late 2014 and early 2017.
Markets were also held in check by a rise in US drilling for new oil production. US rig counts have continued to rise sharply, implying that production will continue to rise as new wells come online.
Additionally, the market retreated as the U.S. Dollar strengthened against other currencies to the highest since December. Higher crude oil prices, meanwhile, support the value for the eventual public offering of Saudi Aramco, the biggest oil company in the world.