09:46 AM EDT, 03/15/2024 (MT Newswires) -- (Refiles to remove a typo.)

Oil prices fell early on Friday, dropping off from a four-month high set as the International Energy Agency warned it expects global inventories to tighten over this year due to OPEC+ production cuts.

West Texas Intermediate crude oil for April delivery was last seen down US$0.65 to US$80.61 per barrel, after rising to the highest since Nov.6 a day earlier, while May Brent crude, the global benchmark, was down US$0.64 to US$84.78.

The drop comes as traders take profits ahead of the weekend following Thursday's bullish outlook from the International Energy Agency, which raised its demand forecast while warning if OPEC+ continues its 2.2-million barrels per day of voluntary production cuts through 2024, global inventories will fall through the year, but could begin to rise if lifted at the end of June.

"WTI and Brent reached four-month highs, breaking key resistance levels after the IEA flipped their 2024 supply/demand forecast to a deficit amid prolonged production cuts from OPEC+," Saxo Bank noted.

Along with OPEC+ cuts, geopolitical risk is also supporting prices as violence in the Middle East continues along with Russia's war on Ukraine. Ukraine has continued its attacks on Russian refineries, potentially cutting into that country's refined product exports.

"Ukraine has now struck eight refineries, which account for 27% of runs in Russia. Of these refiners, 3 have seen a significant drop in refinery throughput since being targeted. The increasing tempo of attacks brings Russia's refined product flows further into question, given Moscow's recent announcements to taper refined export cuts broadly through June as well as a six-month ban on gasoline exports. We expect these energy infrastructure attacks to continue as Kyiv aims to halt Moscow's recent military momentum," Helima Croft, Head of Global Commodity Strategy and MENA Research at RBC Capital Markets, noted.