Opec and its partners anticipate oil inventories to decline further in the next months, as per Opec's secretary-general on Monday, implying that producers' attempts to support the market are working.

Oil stockpiles in industrialized countries declined by 6.9 million barrels in April, as per Mohammad Barkindo, who publicly informed for the first time during a virtual presentation at the Nigeria International Petroleum Summit. The amount is 160 million barrels lower than the same time last year.

“We anticipate greater drawdowns in the coming months,” he added.

Opec+, the Organization of Petroleum Exporting Countries and Allies, decided in April to rebuild 2.1 million barrels per day (bpd) to the market from May to July. At a meeting last week, the producers adhere to their decision, causing oil prices to climb.

“The market has continued to respond favorably to the decisions we made, including the upward adjustments in output levels that began in May of this year,” he added.

While he highlighted that vaccine deployment and the “massive fiscal stimulus” assisted an optimistic prognosis, he also cautioned that unequal worldwide vaccine availability, rising inflation, and ongoing COVID-19 occurrences remained dangers to oil demand.

As per Barkindo, Opec+ met 114 % of agreed-upon production limitations in April.

Last year, the organization decreased output by a record 9.7 million bpd as demand fell due to the COVID-19 outbreak. The remaining limitations will be 5.8 million bpd as of July.

Throughout a subsequent panel discussion at the seminar, he stressed that, while Opec does not ignore climate change, the world economy still needs oil.

“We motivate all of our member nations to continue investing in renewables while also meeting the need for hydrocarbons,” he added.

Oil surged to a two-year high above $72 per barrel on Monday, extending this year's rise fueled by rising demand and Opec+ supply cuts, before retreating as speculators grabbed profits.

Demand is increasing in the United States and Europe as COVID-19 limitations are eased, and India eases its lockup in another encouraging sign for fuel usage.

Opec and its partners are adhering to agreed-upon supply limits until the end of July. Brent crude touched $72.27, its highest rate since May 2019, but was down 6 cents, or 0.1% to $71.83 at 1350 GMT. The West Texas Intermediate crude oil agreement in the US reached $70 for the first time since October 2018 and was last up 10 cents, or 0.1 percent, to $69.72.

“Oil demand is already growing this year, and many traders have gambled on the projected summer surge, purchasing oil at lower prices in the past and now reaping the rewards,” said Rystad Energy analyst Louise Dickson.

Crude had climbed for the previous two weeks, and Brent has gained by more than 37% this year, aided by production limitations imposed by the Organization of Petroleum Exporting Countries and its partners and a partial recovery in demand.

“Including some progress in the epidemic situation in India and the rebound in the United States, China, and Europe staying on track,” said Jeffrey Halley, an analyst at brokerage OANDA.

When WTI touched $70, investors might well have sold some futures, said Avtar Sandu of Phillips Futures in Singapore. Analysts cited the possibility of increased Iranian production and a decrease in China's oil imports as concerns.

“The tailwinds that price of oil are presently experiencing from nearly all sides remains strong,” Commerzbank analyst Eugen Weinberg said, referring to Monday's price fall. On Monday, global equities remained range confined as markets absorbed Friday's disappointing U.S. employment report and a worldwide tax agreement reached by the G7 group of countries, while still anticipating inflation statistics forthcoming this week.

Investors were concerned about how large tech firms' shares would respond to the G7's agreement on a minimum worldwide corporation tax rate of approximately 15%, but obtaining consent from the entire G20 may be a big order.

Since then, the response has been muted, with Nasdaq futures down 0.4 % and S&P 500 futures down 0.2%.

“I would think that it (the tax arrangement) is not benefiting the market in the perspective that these Internet companies would be charged more....it influences equities market sentiment, however, the fact is that this has already been priced in,” said Sebastien Galy, senior macro analyst at Nordea Asset Management.

European equities began lower, dropping from all-time highs, with commodities sectors heading drops as sentiment worsened following weaker-than-expected Chinese trade data and inflation concerns.

MSCI's All-Country World index, which monitors equities in 49 countries, slightly under record highs and was flat the day after European trading, began.

MSCI's broadest index of Asia-Pacific equities outside Japan fell 0.05%, threatening the fourth session of declines. The Nikkei 225 index in Japan rose 0.3% reaching its highest level in nearly a month.