Oil near mid-2015 highs

SINGAPORE/LONDON. — Oil prices stood near their highest in two and a half years, supported by strong data from top importer China amid thin trading activity ahead of the New Year weekend.

Heading into 2018, traders said market conditions were relatively tight because of supply cuts led by the Middle East-dominated Organization of the Petroleum Exporting Countries (OPEC) and Russia.

US West Texas Intermediate (WTI) crude futures CLc1 were up 2 cents at $59,66 a barrel by 1328 GMT. WTI this week broke through $60 a barrel for the first time since June 2015 and was supported by a report from the American Petroleum Institute (API) showing a 6 million barrel drop in crude oil inventories to 432,8 million barrels.

Brent crude futures LCOc1 were flat at $66,44 a barrel, having breached $67 this week for the first time since May 2015. Support also came from China’s release of strong import quotas for 2018, which could lead to another record for purchases by the world’s biggest importer. China’s oil thirst has also led to a 3 percent monthly drawdown in its crude inventories in November, to a seven-year low of 26.15 million tonnes, Xinhua data showed yesterday.

Oil markets have also been tightened by a year of OPEC and Russia-led production cuts that started last January and are scheduled to continue throughout 2018. A Reuters monthly poll showed yesterday that analysts expect Brent crude to stay close to $60 in 2018. Pipeline outages in Libya and the North Sea have also supported prices.

“Given the much stronger price response to supply disruptions in the wake of OPEC supply cuts, the market is poised to make further gains,” said Stephen Innes, head of trading for Asia/Pacific at futures brokerage Oanda. — Reuters.