Brent oil price ease back from two-year highs

A worker checks the valve of an oil pipe Image copyright Reuters

The price of oil has fallen back on Tuesday after earlier hitting a two-year high.

Rising demand and geopolitical worries had fuelled the increase, along with indications that production cuts by Opec members are starting to bite.

Brent rose about 4% to just short of $60, its highest since July 2015, point, before dropping back to $58.59.

US West Texas crude went above $52 a barrel before falling back to $51.87.

The oil market has been in a downturn for almost three years. But the head of BP's oil trading division in Asia, Janet Kong, told a Financial Times conference the market was now "at a juncture".

As well as increased demand, especially from China, Turkey's threat to disrupt oil flows from Iraq's Kurdistan region, helped push up prices on Monday.

Turkey has said it could cut off a pipeline that carries oil from northern Iraq to the global market, putting more pressure on the Kurdish autonomous region over its independence referendum.

"If this boycott call proves successful, a good 500,000 fewer barrels of crude oil per day would reach the market," analysts at Commerzbank said.

Meanwhile, Opec, Russia and several other producers have cut production by about 1.8 million barrels per day (bpd) since the start of 2017, helping oil prices rise by about 15% in the past three months.

At an Opec meeting on Friday, several countries said output curbs were having the desired impact on the market and price.

Kuwaiti oil minister Essam al-Marzouq said the cuts had reduced global crude stocks to their five-year average, which is Opec's target.

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