Oil prices hit fresh two-and-a-half-year highs as market tightens amid Iran tensions
Oil prices on Thursday hit fresh two-and-a-half-year highs and were at levels last seen at the start of the commodity slump in 2014 and 2015, with markets tightening amid tensions in Iran and due to ongoing production cuts led by the Organization of the Petroleum Exporting Countries (OPEC).
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 US, Japan and Germany.
US West Texas Intermediate (WTI) crude futures CLc1 were at $61.92 a barrel at 6 pm, up 29 cents from their last close. They hit $62.21 shortly before, the highest level since May 2015.
Brent crude futures LCOc1 – the international benchmark for oil prices – were at $68.04 a barrel, up 20 cents, after hitting a May 2015 high of $68.27 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.
Recent freezing weather in the US has also spurred shortterm demand, especially for heating oil.
“The market is clearly getting more bullish on oil as inventory levels get closer to the five-year average. Geopolitical uncertainty in Iran, OPEC’s third largest producer, is also helping to support the price as citizens are again protesting the government,” said William O’Loughlin, an investment analyst at Australia’s Rivkin Securities.
Iran’s elite Revolutionary Guards have deployed forces to three provinces to put down anti-government unrest that has been ongoing for a week, their commander said on Wednesday.
In the US, crude oil inventories fell by 5 million barrels in the week leading up to December 29 to 427.8 million barrels, industry group the American Petroleum Institute said on Wednesday.
Potentially undermining the trend toward tighter market conditions is US oil production C-OUT-T-EIA, which has risen by almost 16 percent since mid2016, hitting 9.75 million barrels per day at the end of last year.