Oil prices edged higher on Tuesday, with U.S. crude touching its highest since December 2014, supported by OPEC-led production cuts and expectations that U.S. crude inventories have dropped for an eighth week.
The Organization of the Petroleum Exporting Countries and allies including Russia are keeping supply limits in place in 2018, a second year of restraint, to reduce a price-denting glut of oil held in inventories.
U.S. West Texas Intermediate crude (WTI) rose 95 cents, or 1.5 percent, to $62.68 a barrel by 11:55 a.m. EST (1655 GMT) after touching its highest since December 2014 at $62.80.
Brent crude was up 81 cents, or 1.2 percent, at $68.59 per barrel after hitting a session high of $68.74, its highest since May 2015.
“You’re so long this market at this point, you could certainly get more interest at these levels,” said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management.
“This is a little more confirmation of what speculators have been looking for and after tomorrow’s (U.S. government inventory) report, we’ll see if they look to do some profit taking.”
OPEC is cutting output by even more than it promised [OPEC/O] and the restraint is reducing oil stocks globally, a trend most visible in the United States, the world’s largest and most transparent oil market.