Brent crude rose as high as $64.32 a barrel, the day after OPEC and other crude producers agreed to extend output cuts until the end of 2018 to tighten global supplies and support prices.
SINGAPORE: Oil prices held firm on Friday, with Brent crude up by more than 10 percent from its December lows on the back of political tensions in OPEC-member Iran and a tightening U.S. market.
U.S. West Texas Intermediate (WTI) crude futures were at $61.95 a barrel at 0151 GMT, 5 cents below their last close but not far off the $62.21 May 2015 high reached the previous day.
Brent crude futures were at $68.03 a barrel, 4 cents below their last settlement, but not far off the $68.27 high from the day before, also the highest since May 2015.
Beyond a brief intraday spike in May 2015, these were the highest price levels since December 2014, during the oil price downturn.
Traders said political tensions in oil producing Iran were supporting prices.
"The protests in Iran add more fuel to the already bullish oil market mood," said Norbert Ruecker, head of commodity research at Swiss Bank Julius Baer.
Oil prices have been supported by production cuts led by the Middle East dominated Organization of the Petroleum Exporting Countries (OPEC) and by Russia, which started in January last year and are set to last through 2018, as well as by strong economic growth and financial markets. [MKTS/GLOB]
This has helped tighten markets. U.S. Commercial crude inventories
That's down 20 percent from their historic peaks last March and close to the five-year average of 420 million barrels.
(For a graphic on 'U.S. oil production and storage levels' click http://reut.rs/2CqcWaC)
CAN THE BULL-RUN LAST?
Given that Iran's oil production has not been affected by the unrest, and that U.S. production
"Prices above $60 per barrel project an overly rosy picture, so we see near-term downside," Ruecker warned.
"Oil production disruptions (in Iran) remain a very distant threat ... Disruptions in the North Sea have been removed with the Forties Pipeline system having resumed full operations. U.S. oil production surpassed the 2015 highs in October and is set to climb to historic highs this year," he said.
Lukman Otunuga, analyst at futures brokerage FXTM, struck a similarly cautious tone.
"Oil started the New Year on an incredibly bullish note ... in part due to ongoing tensions in Iran ... (and) over OPEC's supply cut rebalancing the markets," he said.
"While the current momentum suggests that further upside is on the cards, it must be kept in mind that U.S. shale remains a threat to higher oil prices." - Reuters
Earlier report:
Oil price at highest in 32 months on inventory drawdown, Iran unrest
NEW YORK: Oil rose on Thursday to its highest since May 2015, on concern about supply risks due to unrest in Iran and another decline in U.S. inventories as refining activity hit a 12-year high.
U.S. oil stocks fell more than expected, continuing a steady drawdown of supplies in the world's largest oil consumer, though stocks of distillates and gasoline rose on heavy refining activity driven in part by year-end adjustments.
However, cold weather across much of the country was expected to keep demand high, as heating oil prices were just off highs not seen since early 2015.
Brent crude, the international benchmark, settled up 23 cents at $68.07 a barrel after hitting a high of $68.27 earlier in the session. U.S. crude settled up 38 cents at $62.01, after earlier hitting $62.21, its highest since May 2015.
Freezing weather in the United States has boosted demand for heating oil. Heating oil futures were down 0.7 percent to $2.0741 a gallon; the contract hit highs not seen since February 2014 earlier in the week.
U.S. crude stocks
"The draw was fairly in line with what we've seen in the latter half of 2017," said Matt Smith, director of commodity research at ClipperData in Louisville, Kentucky. U.S. crude stocks have dropped more than 78 million barrels since the middle of 2017 to 424.5 million, the lowest since September 2015.
Anti-government protests since last week in Iran, OPEC's third-largest producer, have added a geopolitical risk premium to oil prices, though the country's production and exports have not been affected, sources said.
"The protests don't put crude oil production at risk; from that perspective it is sort of a moot geopolitical factor," said Sarp Ozkan, analyst at Drillinginfo.com in Denver.
Apart from a spike in May 2015, oil is at its highest since December 2014 - the month after a decision by the Organization of the Petroleum Exporting Countries to stop cutting output to support prices.
OPEC, supported by Russia and other non-members, began to reduce output a year ago to remove a glut built up in the previous two years. Compliance has been high, as producers have decided to extend the supply pact until the end of 2018.
OPEC's cuts are helping reduce global inventories, even as production continues to rise in the United States. U.S. production rose to 9.78 million barrels in the last week - Reuters
Earlier report:
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