Oil prices posted their strongest opening to a year since 2014 on Tuesday, with crude rising to mid-2015 highs amid rallies in Iran and ongoing supply cuts led by OPEC and Russia.
Oman crude also crossed $64 mark for the first time in two years to close at US$ 64.50, a change of 52 cents from the previous day.
US West Texas Intermediate (WTI) crude futures CLc1 were at $60.63 a barrel at 0747 GMT, up 21 cents, or 0.4 percent, after hitting $60.74 earlier in the day, the highest since June 2015.
Brent crude futures LCOc1, the international benchmark, were at $67.18 a barrel, up 31 cents, or 0.5 percent, after hitting a May 2015 high of $67.29 a barrel earlier in the day.
Falling inventories globally and strong economic growth offset the restart of the Forties pipeline and the resumption of production following a pipeline outage in Libya,” said Jeffrey Halley, senior market analyst at futures brokerage Oanda in Singapore.
The 450,000 barrels per day (bpd) capacity Forties pipeline system in the North Sea returned to full operations on Dec. 30 after an unplanned shutdown.
Oil markets have been supported by a year of production cuts led by the Middle East-dominated Organization of the Petroleum Exporting Countries (OPEC) and Russia. The cuts started in January 2017 and are scheduled to cover all of 2018.
U.S. commercial crude oil inventories have fallen by almost 20 percent from their historic highs last March, to 431.9 million barrels.
Strong demand growth, especially from China, has also been supporting crude.
Only rising U.S. production, which is on the verge of breaking through 10 million bpd, is somewhat hampering the outlook into 2018.
“We think U.S. tight oil production growth warrants close monitoring as it could spoil OPEC’s market-balancing efforts, pushing the market into surplus in 2018,” Barclays bank said on Tuesday. Reuters