By Jessica Resnick-Ault
NEW YORK (Reuters) - Oil prices pulled back Thursday after climbing above $80 a barrel for the first time since November 2014, as dollar strength and strong U.S. crude production pumped the brakes on a rally driven by geopolitical concerns.
Brent crude futures
U.S. West Texas Intermediate (WTI) crude futures were down 15 cents at $71.34 after also hitting their highest since November 2014, at $72.30 a barrel.
Geopolitical tensions provided a floor for the price, traders said.
"We are going to have reduced supplies from Iran in six months and Venezuela hasn't shown that they can stop the drop in their supplies," said Gene McGillian, vice president of research at Tradition Energy."
U.S. President Donald Trump's decision this month to withdraw from an international nuclear deal with Iran and revive sanctions that could limit crude exports from OPEC's third-largest producer has boosted oil prices.
A rapid decline in Venezuela's crude production has further roiled markets in recent months.
"The geopolitical noise and escalation fears are here to stay," said Norbert Rücker, head of macro and commodity research at Swiss bank Julius Baer. "Supply concerns are top of mind after the United States left the Iran nuclear deal."
Several banks have in recent days raised their oil price forecasts, citing tighter supplies and strong demand.
Further supporting prices, Royal Dutch Shell
On the flip-side, however, high oil prices could hit consumption, the International Energy Agency warned on Wednesday as it lowered its global oil demand growth forecast for 2018 to 1.4 million barrels per day (bpd) from 1.5 million bpd. [EIA/S]
Leading production increases is the United States, where crude output
The result has been a widening difference between U.S. crude and benchmark Brent. WTI traded at $8.20 a barrel below Brent on Thursday, the most since April 2015.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)