SINGAPORE: Oil prices hit their highest levels since 2014 on Wednesday due to ongoing production cuts led by Opec as well as healthy demand, although analysts cautioned that markets may be overheating.
A broad global market rally, including stocks, has also been fuelling investment into crude oil futures.
Brent crude futures were at $69.15 a barrel at 06:48 GMT, 33 cents, or 0.5 per cent, above their last close. Brent touched $69.29 in late on Tuesday trading, its strongest since an intra-day spike in May 2015 and, before that, December 2014.
US West Texas Intermediate (WTI) crude futures were at $63.44 a barrel — 48 cents, or 0.8 per cent, above their last settlement. They marked a December 2014 high of $63.53 a barrel in early trading. “The extension of the Opec agreement and declining inventories are all helping to drive the price higher,” said William O‘Loughlin, investment analyst at Australia’s Rivkin Securities.
In an effort to prop up prices, the Organization of the Petroleum Exporting Countries (Opec) together with Russia and a group of other producers last November extended an output cut deal that was due to expire in March this year to cover all of 2018.
The cuts, which have mostly targeted Europe and North America, were aimed at reducing a global supply overhang that had dogged oil markets since 2014.
The American Petroleum Institute said late on Tuesday that crude inventories fell by 11.2 million barrels in the week to Jan. 5, to 416.6 million barrels.
This came as the US Energy Information Administration (EIA) raised its 2018 world oil demand growth forecast by 100,000 barrels per day from its previous estimate. — Reuters
Oman Observer is now on the WhatsApp channel. Click here
