Oil holds near November 2014 highs, eyes bull flag breakout

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Crude oil futures pushed higher again in European morning trading Tuesday, with geopolitical risk remaining elevated and the market still digesting OPEC's higher forecasts for global demand this year.

Brent crude futures, the worldwide benchmark for oil prices, were at $78.21 per barrel at 0639 GMT, virtually unchanged from their last close and not far off a three-and-a-half year high of $78.53 a barrel reached the previous session.

US light crude was 5 cents higher at $71.01 a barrel, also not far off its highest since November 2014.

The surge in oil prices comes at a time of tight supply amid record Asian demand and voluntary output restraint by the Organisation of the Petroleum Exporting Countries and non-OPEC producers, including Russian Federation.

Analysts noted that uncertainties remain in the oil market due to strong global demand expectations, geopolitical tensions and stabilizing US production growth in the second quarter.

U.S. crude is trading at a hefty discount to Brent, the global marker, thanks to sharp rises in United States production to 10.7-million bpd, which has left the American domestic oil market well supplied.

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With renewed US sanctions looming against OPEC-member Iran, analysts said crude prices were well supported.

"For 2018, oil demand growth is forecast to increase by around 1.65 million barrels a day to average 98.85 million barrels a day", the report said, revising upward from its forecasting last month.

The tightening market has all but eliminated a global supply overhang which depressed crude prices between late 2014 and early 2017.

Opec figures published on Monday showed that oil inventories in the Organisation for Economic Co-operation and Development (OECD) industrialised nations in March fell to 9-million barrels above the five-year average, down from 340-million barrels above the average in January 2017.

The revised demand growth predictions come at a time when the global crude market is also facing other significant supply-side question marks, such as the impact of the imposition of USA sanctions on Iranian output and the ongoing struggles of the Venezuelan oil sector.