Oil markets fell slightly on Friday, but remain stable with support from production cuts and strong demand, which has narrowed the gap between supply and demand in the market, but the prospect of increased US production has dampened prices.
By 0756 GMT, world benchmark crude hit $ 63.76 a barrel, down 17 cents from the previous settlement price, but only about a dollar from a two-year high of $ 64.65 a barrel earlier this week.
West Texas Intermediate crude was $ 57.07 a barrel, down 10 cents, but still not far from its two-and-a-half-year high of $ 57.92 a barrel.
The high prices came as a result of efforts by the Organization of Petroleum Exporting Countries (OPEC) and Russia to narrow the gap between supply and demand in the market by curbing supplies, as well as strong demand and rising political tensions.
Goldman Sachs said, "Oil prices rose strongly during the last week ... The latest catalyst for this upward move was the sharp escalation of geopolitical tensions at the weekend. The bullish wave was supported by the growing confidence in the OPEC extension and the strong demand for oil."
However, Morgan Stanley warned that "this (bullish) oil move may not last long," noting that oil shale production could return relatively quickly.
Goldman also warned against rising price volatility in the coming period due to rising tensions in the Middle East, especially between Saudi Arabia and Iran, political rivals and OPEC members, as well as increased US oil production.
OPEC is scheduled to discuss production policy at a meeting on Nov. 30, and the organization is expected to extend production cuts beyond the current deadline for the agreement to expire in March 2018.