Brent crude hits $70 for first time since 2014

Oil Prices Hit Historic High On Weak Dollar

Oil Prices Hit Historic High On Weak Dollar

Still analysts are cautious of its long-term prospects as United States shale is expected to continue to eat away at OPEC's production cut efforts as prices rise, although that caution appears to be weakening somewhat as prices continue to hold. West Texas Intermediate, the USA benchmark for the price of oil, was up 0.41 percent to $63.83 per barrel.

Oil prices have been steadily rising since the major OPEC group of oil-producing nations, along with Russian Federation, agreed last autumn to maintain production cuts - credited with lifting prices a year ago as they intended. "Oil is acting like an internet stock and when it does that you know it's getting overcooked", said Walter Zimmerman, chief technical analyst for United-ICAP.

It said this was likely to have a knock-on effect on the forecourt due the increase causing the wholesale price of fuel to rise.

Data from the U.S. Commodity Futures Trading Commission shows the size of the short position for swap dealers has climbed into record territory, an indication of increased producer hedging.

With the cold front lifting this week, the focus will quickly shift back to whether US production can head even higher - as many forecasters expect - particularly given this recent boost in oil prices.

Kurdish forces hold Iraqi oil fields which has also exacerbated the lower level of oil output and exports.

A drawdown in USA inventories and a pullback in production, combined with steady demand and the extension of OPEC's global supply cut agreement, has bolstered the oil-market rally for several weeks, helping push Brent crude through $70 a barrel for the first time since December 2014.

Analysts surveyed Monday by S&P Global Platts expect crude stocks fell 3.5 million barrels last week. WTI Crude oil is now trading at $63.39 per barrel, down 0.64% on the day.

Brent for March settlement gained as much as 51c, or 0.8%, to $68.29 a barrel on the London-based ICE Futures Europe exchange after adding 0.2% on Monday. The price of Brent crude oil averaged $54/barrel (b) in 2017, an increase of $10/b from 2016. By the way, Iran is the OPEC's third-biggest producer of crude oil.

With oil prices rising by 13% since early December, however, fears of overheating the market are rising. Since the beginning of 2017, the Organization of Petroleum Exporting Countries and its allies have sought to reduce oil production by nearly 1.8 million barrels a day, curbing exports and business for tankers on key trade routes. Yet for the oil majors it could hamper recovery at a time when higher crude prices and lower costs are finally seeing them return to profits.