Oil prices have dipped marginally, but stayed close to the three-year highs reached on 19 April.

The Organisation of the Petroleum Exporting Countries (OPEC) led supply cuts and strong demand continue to support oil prices, curbing the excess supplies in the oil market.

Brent crude oil futures LCOc1 declined four cents to reach $73.74 per barrel, while US West Texas Intermediate (WTI) crude futures CLc1 fell 13 cents to trade at $68.16, Reuters reported.

On 19 April, both the contracts reached new highs, hitting their highest levels in more than three years.

Both Brent and WTI futures are set to record their second consecutive weekly gains.

Markets resorted to some profit-taking on Friday following the new highs on the previous day.

“OECD commercial inventories could fall back to a level not seen since the oil price collapse that began in 3Q14.”

However, markets are gripped with caution as Russia’s energy minister Alexander Novak was reported saying that the output restrictions in place since January last year could be relaxed.

As per the existing arrangement, the deal between OPEC and other producers including Russia to cut production in order to shore up prices will last under the end of this year.

The efforts being taken by the OPEC-led group appears to have the desired effect as the markets have been tightened to an extent.

US investment bank Jefferies was quoted by the news agency as saying: “Commercial inventories in the OECD are now essentially at their five-year average, and drawdowns likely accelerate as refineries emerge from maintenance ahead of peak seasonal demand.

“OECD commercial inventories could fall back to a level not seen since the oil price collapse that began in 3Q14. On a day of forward demand basis, we believe cover could drop below 57 days later this year, a level last seen in 2011.”

Oil prices have also received support from market expectations of re-introduction of US sanctions on Iran, an important oil producer.