The main bullish factors were: the Opec+ output cut deal extension throughout 2018, a strong Opec compliance to the cut deal in December 2017, strong economic and financial data starting the year 2018, U.S. crude oil stocks continuous drawdown, a cold weather in North America boosting demand for heating oil, and socio-economic protests in Iran.
Lukman Otunuga, analyst at futures brokerage FXTM, struck a similarly cautious tone, saying: "While the current momentum suggests that further upside is on the cards, it must be kept in mind that US shale remains a threat to higher oil prices".
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.
IANS reported that the United States could become the oil world's new king in 2018 as it was poised to ramp up crude oil production by 10 per cent to about 11 million barrels per day.
Brent oil price rose above $68 for the first time since May 13, 2015. Iranian oil industry and shipping sources said protests have had no impact on oil production or exports so far.
"Beyond the recent focus on street protests, the potential reinstatement of USA sanctions targeting the Iranian oil industry remains an issue", JBC analysts said.
OPEC as well as non-OPEC members including Russian Federation, initiated an agreement to cut supplies in 2016, with the goal of lifting prices by diminishing the two-year excess of supply.
"As such, we expect supply to increase this year and the market to only fall into a small deficit by end-2018". Strong demand growth, especially from China, has also been supporting crude.
Crude oil futures extended strong recent gains Thursday morning after an industry survey showing another significant drop in U.S. inventories.
OPEC's cuts are helping reduce global inventories. "You're seeing a little bit more of a bullish push-up in the price of oil", Mark Watkins, a Park City, Utah-based regional investment manager at U.S. Bank Wealth Management, which oversees $142 billion in assets, said by telephone.
OPEC members have a poor track record of sticking to agreed quotas, but they kept within 95% of the required cuts, with Saudi Arabia cutting further, meaning the aggregate production cut held.
The spurt in oil prices is definitely not good news for India, which imports over 80% of its crude requirements.
While $60-a-barrel crude may temper demand slightly - Brent averaged about $55 a barrel previous year and $45 a barrel in 2016 - if the world economy keeps growing strongly it will be harder to make a bearish case.
The decline today is "more related to profit-taking after a good week", said Giovanni Staunovo, a commodity analyst at UBS Wealth Management.
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