SINGAPORE: Oil prices on Thursday hit their highest in over 2½ years, marking levels not seen since before a slump in commodity markets in 2014/15, boosted by tensions in key producer country and by ongoing Opec-led output cuts. Prices were also buoyed by Asia’s stock markets, which flirted with 10-year highs on Thursday amid strong data from leading economies including the United States, Japan and Germany.
US West Texas Intermediate crude futures were at $62.12 a barrel at 06:23 GMT, up 49 cents, or 0.8 per cent, from their last close. They touched $62.17 shortly before, their highest level since May 2015.
Brent crude futures — the international benchmark for oil prices — were at $68.13 a barrel, up 29 cents, or 0.4 per cent, after hitting a May-2015 high of $68.19 shortly before.
Beyond a brief intraday spike in May, 2015, these were the highest crude price levels since December, 2014, at the start of the oil price downturn.
Freezing weather in the United States has also spurred short-term demand, especially for heating oil.
“The market is clearly getting more bullish on oil as inventory levels get closer to the five-year average. Tensions in Opec’s third largest producer is also helping to support the price,” said by William O’Loughlin, investment analyst at Australia’ Rivkin Securities.
The tension has not affected the country’s oil output, however.
“The continued protests have triggered off a ‘what if’ reaction in an already extremely skittish oil market,” said Sukrit Vijayakar, director at energy consultancy Trifecta.
He added that beyond potential strikes by oil workers, the risk of supply disruptions was low as “the country’s oil resources are not near any of the major population centres or sites where the protests are playing out.
In the United States, crude oil inventories fell by 5 million barrels in the week to December 29 to 427.8 million barrels, industry group the American Petroleum Institute said. — Reuters
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