Oil prices rise to a five-month high

Both Brent and WTI breached the highest levels since November at US$70.76 and US$63.48 per barrel earlier on Monday morning.

The sanctions from the United States (US) on Iran and Venezuela and the ongoing supply cuts from the Organization of the Petroleum Exporting Countries (Opec) drove oil prices to rise to the highest levels since November on Monday.

International benchmark Brent futures were at US$70.74 per barrel at around 1.00am Greenwich mean time on Monday, higher by 25 US cents or 0.37%.

Meanwhile, US West Texas Intermediate (WTI) crude rose by 21 US cents or 0.3%, at US$63.47 per barrel.

Both Brent and WTI breached the highest levels since November at US$70.76 and US$63.48 per barrel respectively, earlier on in the morning.

Upside on Brent and WTI forecasted

Brent has gained 30% this year, while WTI has risen almost 40%, supported by rising global demand, production cuts from Opec and the US sanctions on Iran and Venezuela.

‘The uptrend for crude oil had been underpinned to a large extent by supply factors of late and the weekend update of Libya unrest further adds to this phenomenon,’ said IG market strategist Pan Jingyi.

Prices on the WTI can now be seen attempting a break on the upside with the US$63.54 resistance in view ‘with the bulls strong in control,’ Ms Pan said.

According to energy consultancy FGE, the supply cuts from Opec removes excess inventories, and the market ‘looks healthy’. The consultancy thinks the market is poised for prices of Brent to rise to ‘US$75 per barrel or higher’.

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