Oil prices cool down after hitting new highs on Tuesday

Oil prices were stable today, not far off mid-2015 highs reached in the previous session, as strong demand and ongoing efforts led by OPEC and Russia to curb production showed some effect.

US West Texas Intermediate (WTI) crude futures were at $60.40 a barrel at 0141 GMT, up 3 cents from their last close, and not far off the $60.74 June 2015 high reached the previous day.

Brent crude futures - the international benchmark for oil prices - were at $66.55 a barrel, down 2 cents but still not far off the $67.29 May 2015 high from the previous day.

Oil prices eased on Tuesday after hitting mid-2015 highs in early trading, as major pipelines in Libya and the UK restarted and US production soared to the highest in more than four decades.

It was the first time since January 2014 that the two crude oil benchmarks opened the year above $60 per barrel, buoyed by large anti-government rallies in Iran and ongoing supply cuts led by Opec and Russia.

US West Texas Intermediate crude futures traded 20 cents lower at around $60.22 a barrel by 11:34 am.

Despite this, there were indicators that markets had overshot in the last days of 2017 and trading this year, as US production is set to rise further and doubts are emerging about whether demand growth can continue at current levels.

The 450,000 barrel per day (bpd) capacity Forties pipeline system in the North Sea returned to full operations on 30 December after an unplanned shutdown. Repairs have been finished on a Libyan oil pipeline damaged in a suspected attack last week and production is restarting gradually, engineers said.

Iranian oil industry and shipping sources said protests in the country have had no impact so far on oil production or exports in OPEC's third largest producer.

Oil markets have been supported by a year of production cuts led by the Middle East-dominated Organization of the Petroleum Exporting Countries and Russia. The cuts started in January 2017 and are scheduled to cover all of 2018.

US commercial crude oil inventories have fallen by almost 20 per cent from their historic highs last March, to 431.9 million barrels.

Strong demand growth, especially from China, has also been supporting crude.

There was also some concern that output by Russia, the world's biggest oil producer and one of the key drivers together with the Organization of the Petroleum Exporting Countries (OPEC) in cutting supplies, was in fact not falling.

As part of the supply cut deal, Russia pledged to reduce its output by 300,000 bpd from the 30-year monthly high of 11.247 million bpd hit in October 2016, which it achieved by the second quarter of 2017, according to Russian energy ministry data.

However, rising US production, which is on the verge of breaking through 10 million bpd, has tempered the bullish outlook.