Crude oil crosses $70 threshold

Oil briefly topped $70 a barrel in London for the first time in three years, as crude markets continued an almost unblemished run of gains for 2018.

The surge waned towards the end of the session, with the global Brent benchmark settling just 6 cents higher for a fourth day of gains. An eight-week long downward spiral in US crude inventories has helped boost prices, with some analysts suggesting $80 is achievable if the Organization of the Petroleum Exporting Countries and its allies stay disciplined in limiting output.

US crude output declined by the most in almost three months last week as a deep freeze forced drillers to suspend operations. This led to draw-downs at the biggest American storage hub in Cushing, Oklahoma, where inventories sit at the lowest level since February 2015.

“The glut is gone. People are starting to realize that,”  Phil Flynn, senior market analyst at Price Futures Group Inc. in Chicago, said by telephone. “The global economy is on fire right now. OPEC doesn’t look like they are going to be raising production anytime soon.”

Brent for March settlement ended the session at $69.26 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a premium of $5.58 to March WTI.

West Texas Intermediate for February delivery advanced 23 cents to settle at $63.80 a barrel on the New York Mercantile Exchange, the highest level since December 2014. Total volume traded was about 62 percent above the 100-day average.