Oil hits highest level since 2014 on concerns about Iran supply

Oil prices surged on Thursday on Thursday for the first time since November 2014 on concerns Iranian exports could fall, reducing supply in an already tightening market as data showed that U.S. crude and gasoline stockpiles have fallen.

Both Brent and WTI were near their highest levels since November 2014. U.S. West Texas Intermediate (WTI) crude futures 64 cents at $72.13 a barrel, while Brent crude futures, the benchmark for oil prices outside the U.S., was up 57 cents at $79.85 per barrel at 0955 GMT

The price of oil was supported by data showing that U.S. crude inventories have decreased, offsetting fears of a global demand slowdown. According to the latest weekly report from the U.S. Energy Information Administration, U.S. crude inventories fell by 1.4 million barrels in the week to May 11, compared with analyst expectations for a 763,000 barrel decrease.

Meanwhile, the International Energy Agency revised its global outlook for 2018 down from 1.5 million barrels per day (bpd) to 1.4 million pbd due to the expected increase in prices for the rest of the year.

Looming sanctions against OPEC-member Iran by the U.S. has contributed to rising oil prices and the market is expected to tighten for the rest of the year, the agency said on Wednesday.

Oil prices have jumped over 70% in the last year due to a rise in demand and restricted supply by the Organization of the Petroleum Exporting Countries (OPEC).

OPEC has been cutting crude output by 1.8 million barrels per day (bpd) to prop up oil prices. The pact began in January 2017 and is set to expire at the end of 2018. While the groups’ efforts to end a global supply glut have been successful, Saudi Arabia is pushing for the cuts to extend into 2019.

In other energy trading, gasoline futures increased 0.22% at $2.2575 a gallon, while heating oil rose 0.52% to $2.2809 a gallon. Natural gas futures inched up 0.07% to $2.817 per million British thermal units.