Oil at 3-year high as OPEC production remains unchanged in last month

Brent crude oil rose above $68 a barrel for the first time since 2015 on Thursday, closing in on its highest level since prices tanked 3.5 years ago and as OPEC production held steady last month.

Futures rose 0.9 percent to above $62 a barrel in New York after adding 2.1 percent on Wednesday. Inventories slid by 4.99 million barrels last week, the American Petroleum Institute was said to report. Government data Thursday is forecast to show supplies fell by 4.7 million barrels, which will be a seventh weekly decrease. OPEC’s output was unchanged in December as the group approached a fresh year of curbs, according to Bloomberg survey.

Rising political tensions in Iran, strong global economic growth, and Opec-led production cuts have all combined to spur oil higher, with signs the market is tightening after a prolonged glut that upended the oil industry and ended the $100 oil era in mid-2014.

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Brent, the international crude oil benchmark, has risen by more than 50 percent in less than six months, stoking fears of stronger inflation but providing a boost to producing countries that have been hard hit by low oil prices in the last three years.

The front-month contract settled at $67.84 a barrel on Wednesday, the highest closing price since 2014, while the May 2015 intraday high of $69.63 a barrel is now within touching distance for oil bulls. Brent reached $68.27 a barrel in early trading on Thursday.

Analysts at JBC Energy in Vienna said that in short-term Iran was the key focus for the market and that while protests in the Islamic Republic had not affected oil infrastructure the prospect of US sanctions posed a risk to supplies from the country, which produces some 3.8m barrels a day or more than 4 percent of global crude supplies.