https://finance.yahoo.com/news/oil-price-prediction-door-open-150522293.html

This article was originally published on ETFTrends.com.

Although U.S. oil output is reaching record levels, surpassing production in some countries that are members of the Organization of Petroleum Exporting Countries (OPEC), some market observers believe crude will continue rallying.

The United States Oil Fund (USO) , which tracks West Texas Intermediate crude oil futures, surged more than 3% yesterday on volume that was well above the daily average, bringing its year-to-date gain to over 20%.

Earlier this week, crude jumped above $70 per barrel “after the State Department ordered allies to halt their imports from Iran by November. This tightens supply heading into the second half of the year and into 2019; given these conditions, the door is now open to $80 per barrel,” reports CNBC.

Recently, OPEC members and participating non-members announced a deal to raise its output by about 600,000 to 800,000 barrels per day.

OPEC’s Role on Oil Price

Saudi Arabia, the largest OPEC producer, actually wanted to increase by about 1 million barrels per day to take advantage of higher prices.

“Several members are unable to add output, and that means only something in the ballpark of an additional half a million barrels per day will actually come online next month,” according to CNBC.

Related: Helima Croft on Disrupting Iran’s Petroleum Exports

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.

Asia could provide a supporting pillar for the energy market as demand among Asian economies is expected to surpass $1 trillion this year, or twice as much as in 2015 and 2016. Asia-Pacific consumers consumes over 35% of the 100 million barrels of oil the world uses per day and the percentage is only rising, Reuters reports.

“While there are some short-term concerns around rising production both from OPEC and U.S. shale, along with trade war-associated risk, the long-term story is bullish. Rising demand and the most recent order from the State Department are two positive catalysts,” notes CNBC.