Oil price tops $60 for first time in more than two years

Oil price tops $60 for first time in more than two years

The production cuts have helped drain inventories in the USA and elsewhere in the developed world, but crude prices have still remained stuck below the Saudi target of $60 a barrel.

The sudden increase in crude prices was attributed to Saudi Arabia voicing support for the extension of an OPEC production cut, according to analysts. Prices rose 1.5 percent to $59.30 on Thursday, the highest close since July 2015.

Oil prices were mainly flat Thursday, as the market held steady in a newfound, higher range for crude.

Global inventory levels are falling and demand is strong, but Brent has remained below $60 a barrel, partly due to concern the crude glut may grow again after March 2018, when the output reduction deal is due to end.

The crude oil price fell in Asia on Thursday as weekly data confirmed a surprise build in USA inventories and investors mulled demand prospects globally.

"The seizure of the Kirkuk oil fields a few weeks ago, coming on the heels of the Kurdish referendum for independence, led to a temporary sidelining of some 400,000 bpd".

"What is interesting is that the pop in WTI futures moved above the September 28 high", said David Thompson, executive vice president at Powerhouse, an energy-specialized commodities broker in Washington. A forecast from the EIA, meanwhile, said expectations for WTI are what drive its forecast for crude oil production.

A weaker dollar makes greenback-denominated commodities, including oil, cheaper for holders of other currencies. We're also seeing record exports at close to 2 million barrels a day, helped by the widening Brent-WTI spread.

Oil fell as the biggest surge in USA output in half a decade overshadowed record overseas demand for American crude and fuels.

Echoing sentiments about a so-called Goldilocks number, Tamas Varga with London oil broker PVM said in an emailed market report that USA crude oil production numbers may be the governor on market direction.

OPEC and some major producers outside the cartel, including Russian Federation, first agreed late a year ago to cap their production at around 1.8 million barrels a day lower than peak October 2016 levels, with the aim of alleviating global oversupply and boosting prices.

Rising U.S. crude production remains an issue for OPEC as it strives to clear a global supply overhang.

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