SINGAPORE: Brent crude oil rose for sixth day on Tuesday, passing $75 a barrel, on expectations that supplies will tighten because fuel is rising at the same time the US may impose sanctions against Iran and OPEC-led output cuts remain in place.
Brent crude oil futures climbed to as high as $75.20 a barrel in early trading on Tuesday, the highest since Nov. 27, 2014. Brent was still at $75 a barrel at 0311 GMT up 29 cents, or 0.4 percent, from its last close.
Brent鈥檚 six-day rising streak is the most since a similar string of gains in December and it is up by more than 20 percent from its 2018 low in February.
US West Texas Intermediate (WTI) crude futures were at $68.98 a barrel, up 34 cents, or 0.5 percent from their last settlement. On Thursday, WTI rose to as high as $69.56, the most since Nov. 28, 2014.
Markets have been lifted by supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC) which were introduced in 2017 with the aim of propping up the market.
The potential of renewed US sanctions against Iran is also pushing prices higher.
Stephen Innes, head of trading for Asia/Pacific at futures brokerage OANDA said new sanctions against Tehran 鈥渃ould push oil prices up as much as $5 per barrel.鈥�
The US has until May 12 to decide whether it will leave the Iran nuclear deal and re-impose sanctions against OPEC鈥檚 third-largest producer, which would further tighten global supplies.
鈥淐rude prices are now sitting at the highest levels in three years, reflecting ongoing concerns around geopolitical tensions in the Middle East, which is the source of nearly half of the world鈥檚 oil supply,鈥� ANZ bank said.
鈥淥il strength is coming from 萝莉视频鈥檚 recent commitment to get oil back up to between $70 to $80 per barrel as well as inventory levels that are back in the normal range,鈥� said William O鈥橪oughlin, investment analyst at Australia鈥檚 Rivkin Securities.
OPEC鈥檚 supply curtailments and the threat of new sanctions are occurring just as demand in Asia, the world鈥檚 biggest oil consuming region, has risen to a record as new and expanded refineries start up from China to Vietnam.
One of the few factors that has limited oil prices from surging even more is US production, which has shot up by more than a quarter since mid-2016 to over 10.54 million barrels per day (bpd), taking it past 萝莉视频鈥檚 output of around 10 million bpd.
As a result of its rising output, US crude is increasingly appearing on global markets, from Europe to Asia, undermining OPEC鈥檚 efforts to tighten the market.