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Oil hovers near highest since 2014 as OPEC sees tighter market

Reuters  |  LONDON 

By George and Dmitry Zhdannikov

LONDON (Reuters) - edged off highs last reached in late 2014 due to rising U.S. stocks but remained well supported by mounting geopolitical tension in the Middle East, shrinking global and expectations of a supply cut extension by OPEC.

Brent crude futures were at $71.84 a barrel at 1315 GMT on Thursday, down 22 cents from their last close. U.S. WTI crude futures were down 12 cents at $66.70.

Both Brent and WTI on Wednesday hit their highest since late 2014 at $73.09 and $67.45 a barrel respectively after said it intercepted missiles over and U.S. warned of imminent military action in

On Thursday, OPEC said the global was close to evaporating due to and its own supply cuts.

U.S. has been booming over the past year since OPEC reduced its own production in tandem with to prop up global

But as collapsed in OPEC member and is still facing hiccups in countries such as and Angola, the oil exporters' group is still producing below its targets, meaning the world needs to use stocks to meet rising demand.

The Organization of the Petroleum Exporting Countries said in its in the developed world fell by 17.4 million barrels in February to 2.854 billion barrels, around 43 million barrels above the latest five-year average.

OPEC told in the global has effectively shrunk by nine-tenths since the start of 2017.

"We have seen an accelerated shrinkage of stocks in storage from unparalleled highs of about 400 million barrels to about 43 million above the five-year average," Barkindo said.

OPEC, and several other non-OPEC producers began to cut supply in January 2017. The pact runs until the end of the year and OPEC meets in in June to decide on its next course of action.

"There is growing confidence that the declaration of cooperation will be extended beyond 2018," Barkindo told "Russia will continue to play a leading role."

Despite this, supplies remain ample and analysts said this would weigh on prices eventually.

said that geopolitical events could keep Brent prices elevated above $70 in April and May, but a downward correction was possible in the second half of the year.

U.S. crude rose by 3.3 million barrels to 428.64 million barrels, while U.S. crude production last week hit a record 10.53 million barrels per day (bpd).

(Additional reporting by in Singapore; Editing by and David Evans)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, April 12 2018. 18:59 IST