Benchmark oil futures open the year with levels above $60

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Oil prices rose to a fresh high on Thursday since 2015 with Brent crude climbing above $68 a barrel amid geopolitical tensions in Iran.

Crude oil prices have broken down the resistance levels of 3,870 and has rallied up till 3,950 levels.

WTI light sweet crude oil was up 15 cents at USD61.80 a barrel, the highest since 2014.

Oil market observers will be looking ahead to an EIA report January 9 outlining the agency's outlook for 2019 and the implications for US crude production.

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The strength of demand growth has been the little-told story of the oil price recovery with consumption expanding by nearly 5m b/d between the start of 2015 and the end of 2017, compared with annual growth of well below 1m b/d when oil was above $100 a barrel. Iran is OPEC's third largest crude producer.

Further gains will be hard to come by as US production threatens to undermine the Organization of Petroleum Exporting Countries' attempt to cut down the global supply glut.

EIA also said crude oil export volumes and the number of destinations for those exports continued to increase.

Saudi Arabia's oil minister, who is the organisation's de facto leader, has reiterated that stocks are still around 150 million barrels too high and it would be premature to discuss an exit strategy or change of course. US oil production C-OUT-T-EIA , driven largely by onshore tight shale oil fields, has risen by nearly 16 percent since mid-2016, to 9.75 million bpd at the end of previous year.

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Front-month Brent futures prices reached nearly $35 per barrel in late 2000 and more than $125 per barrel in early 2011. The pact will run until the end of 2018.

Yet, surging US production could offset some of the cuts from OPEC producers, as USA production rose to 9.78 million barrels a day in the latest week, according to Wednesday's report.

The Opec adherence to the global oil output cut increased by 3% in December 2017 to reach 128%, according to a Reuters survey.

It further noted that the global oilfield services industry would continue its recovery from the oil price slump in 2018, though the health of the sector will remain frail.

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But in doing so, the organisation risks tightening the market too much, sending prices sharply higher and encouraging a faster-than-expected acceleration in production from US shale producers. Another concern is Venezuela, where dire economic conditions have taken a toll on oil production. Crude inventories slid by 7.42 million barrels last week, also the biggest decline since August, according to government data Thursday.

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