An oil well is seen near Denver, Colorado. Picture: Reuters
An oil well is seen near Denver, Colorado. Picture: Reuters

London — Oil prices rose on Thursday to their highest since late 2014 as US crude inventories declined, moving closer to five-year averages, and after sources told Reuters top exporter Saudi Arabia is seeking to push oil prices higher.

Brent crude oil futures rallied as high as $74.44 a barrel, the strongest since November 27 2014, the day that oil cartel Opec decided to pump as much as it could to defend market share, sending the price to a low of $27 just more than a year later.

Brent futures were at $74.35 a barrel at 8.23am GMT, up 87c from their last close. US West Texas Intermediate (WTI) crude futures rose 71c to $69.18 a barrel. WTI had earlier hit $69.27, its best level since December 2 2014.

"Oil prices continued to climb on Thursday as a decline in US crude inventories and commentary from Saudi Arabia that it would be happy to see crude rise to $80 or even $100 helped boost prices," RBC said in a note.

Opec and other major producers, including Russia, started to withhold output in 2017 to rein in over-supply that had depressed prices since 2014. Opec and its partners will meet in Jeddah, Saudi Arabia, on April 20. Opec will then meet on June 22 to review its oil-production policy.

Reuters reported on Wednesday that top oil exporter Saudi Arabia would be happy to see crude rise to $80 or even $100 a barrel, which was seen as a sign that Riyadh will seek no changes to the supply-cut deal.

"The Saudis and their colleagues in Opec need higher oil for their fiscal positions and the Kingdom is on a bold — and costly — reform programme. So they might continue to squeeze the lemon while they have the chance," said Greg McKenna, chief market strategist at futures brokerage AxiTrader.

Since the start of the supply cuts, crude inventories have gradually declined from record levels towards long-term average levels.

In the US, the Energy Information Administration (EIA) said on Wednesday that commercial crude stocks fell by 1.1-million barrels in the week to April 13, to 427.57-million barrels, close to the five-year average level of about 420-million barrels.

Further supporting oil prices is an expectation that the US will re-introduce sanctions against Iran, Opec’s third-largest producer, which could result in further supply reductions from the Middle East.