Oil prices held firm on Tuesday as ongoing production cuts by OPEC and looming U.S. sanctions against Iran tightened the market amid strong demand.
Brent crude futures , the international benchmark for oil prices, were at $ 78.37 per barrel at 0028 GMT, up 14 cents from their last close and not far off a three-and-a-half year high of $ 78.53 a barrel reached the previous session.
U.S. West Texas Intermediate (WTI) crude futures were at $ 71.09 a barrel, up 13 cents and also not far off their Nov. 2014 high of $ 71.89 a barrel reached last week.
Markets have generally tightened as the Organization of the Petroleum Exporting Countries (OPEC), led by Saudi Arabia, have been withholding supplies since 2017 in order to push up oil prices.
With renewed U.S. sanctions looming against OPEC-member Iran and oil demand strong, analysts said crude prices were well supported.
“The commitment of Saudi Arabia and the rest of OPEC to the production cuts is a major factor in supporting the price at the moment as well as the possibility of reduced exports from Iran due to sanctions,” said William O’Loughlin, investment analyst at Rivkin Securities.
The tightening market has all but eliminated a global supply overhang which depressed crude prices between late 2014 and early 2017.
OPEC figures published on Monday showed that oil inventories in OECD industrialised nations in March fell to 9 million barrels above the five-year average, down from 340 million barrels above the average in January 2017.