Oil prices rose about 2 percent to their highest in two and a half years on Wednesday, with buying spurred by a sixth day of unrest in Iran and strong economic data from the United States and Germany.
Today, oil prices remained near levels last seen in late 2014/2015, with markets tightening amid tensions in Iran and due to ongoing OPEC-led production cuts.
U.S. West Texas Intermediate (WTI) crude futures were at $62.09 a barrel, up 48 cents from their last close.
Brent Crude Futures – the international benchmark for oil prices – were at $68.17 a barrel, up 28 cents.
Beyond a brief intraday spike in May 2015, these were the highest crude oil prices since December 2014, at the start of the oil price downturn.
William O’Loughlin, investment analyst at Australia’ Rivkin Securities said,
Oil continued its rally overnight … 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.
Iran’s elite Revolutionary Guards have deployed forces to three provinces for putting down anti-government unrest that has been ongoing for a week, their commander said on Wednesday.
In the United States, crude oil inventories fell by 5 million barrels in a week to 427.8 million barrels, American Petroleum Institute said on Wednesday.
Potentially undermining the trend towards tighter market conditions is U.S. oil production, which has risen by almost 16 percent since mid-2016 hitting 9.75 million barrels per day (bpd) at the end of last year.
Official U.S. Energy Information Administration (EIA) storage and production data is due on Thursday.