On Thursday, OPEC announced it would extend cuts in oil output by nine months to March 2018, after November's landmark deal failed to clear a global supply overhang.
The market was disappointed, sending prices nearly five percent lower as investors were anticipating deeper cuts, CNBC wrote.
"This is a bit of an overreaction. Markets are heading towards more rebalancing in Q3 and Q4 of this year," said Wood Mackenzie's research director for Asia refining, Sushant Gupta.
Crude oil futures were lower on Friday in Asia at 1.20 p.m. with US West Texas Intermediate and European Brent 0.7 percent and 0.5 percent lower at $48.55 and $51.18 a barrel respectively.
After OPEC's production cuts, Wood Mackenzie expects global supply to increase about 200,000 barrels per day while demand grows at 1.3 million barrels per day.
"There will be a meaningful drawdown in inventories," said Gupta.
Oil prices will likely be lifted in the last two quarters of 2017, Gupta added. Wood Mackenzie expects international Brent to average $55 a barrel this year.
That oil prices were falling after OPEC's decision reflect's the oil group's mismanagement in communication as it telegraphed the extension well ahead of its announcement, allowing for profit-taking now after earlier gains, said Bordier and Cie's Chief Investment Officer Bryan Goh.
"Physical markets are moving into balance; we now have three weeks of combined inventories draw in crude, distillates and gasoline so fundamentals speak of faster rebalancing in the market," Goh said. Goh also expects higher prices later in the year, as does JBC Energy Asia's managing director, Richard Gorry.
Next year however, OPEC is going to have to deal with the same overcapacity problem again even if an inventory drawdown will help the market in the second half of the year, Gorry told CNBC's 'Capital Connection'. OPEC will need to continue to manage the market, he added.
"The depth of cuts is fine, however, the length of cuts not going to be significant. Oil markets are going to be grossly oversupplied in 2018 without OPEC action. They will be oversupplied in 2019 without OPEC action," Gorry said.