Oil prices hit their highest level since November 2014 on Thursday, with Brent crude creeping ever closer to $80 per barrel as supplies tightened and demand remained strong.
Brent crude futures LCOc1 were at $79.40 per barrel at 0617 GMT, up 0.14 percent from their last close after marking their highest in more than 3-1/2 years.
U.S. West Texas Intermediate (WTI) crude futures were at $71.73 a barrel, up 24 cents, or 0.3 percent, from their last settlement and not far off Tuesday’s $71.92 a barrel – also a level not seen since November 2014.
ANZ bank said on Thursday that Brent was “now threatening to break through $80 per barrel … (as) geopolitical risks continue to support prices, (and) an unexpected fall in inventories in the U.S. got investors excited.”
U.S. crude inventories C-STK-T-EIA dropped by 1.4 million barrels in the week to May 11, to 432.34 million barrels.
ANZ said the falling U.S. inventories were “raising concerns of tight markets heading into the U.S. driving season,” during which demand typically rises.
U.S. bank Morgan Stanley said it had raised its Brent price forecast to $90 per barrel by 2020 due to a steady increase in demand.
Even at $80 per barrel, the costs of oil are huge, with Asia’s consumption costing $1 trillion a year, twice as much as during the price lull of 2015/2016.