Brent crude has surpassed $68 per barrel for the first time since May 2015. Oil prices have been buoyed by information that joint production cuts between Russia and Saudi Arabia-led OPEC are working.
The European benchmark Brent touched $68.29 per barrel on Tuesday before retreating to $67.91. The US West Texas Intermediate benchmark was also trading near multi-year highs at $61.95.
Prices were supported by an OPEC+ agreement to extend productions cuts until the end of this year.
Analysts are also predicting that US crude inventories fell for an eighth week. The Wednesday data from the US Energy Information Administration is forecast to show that American stockpiles dropped by 4.1 million barrels.
“Oil prices remain on an upward trajectory,” Carsten Fritsch, analyst at Commerzbank, told Reuters.
“In view of sharply falling US crude oil stocks and record-high compliance with the production cuts by OPEC, market participants are convinced that the market is continuing to tighten.”
Unrest in Iran, OPEC’s third-largest oil producer, is also supporting the prices. OPEC member Venezuela’s economic problems are affecting its production and exports, giving investors an opportunity to buy oil futures.
A Reuters source in an unnamed OPEC Middle Eastern producer told the agency that the cartel would increase production only in case of sustained output disruptions from Iran and Venezuela.