Oil prices have received general support from production cuts led by OPEC and Russian Federation, which started in January a year ago and are set to last through 2018, as well as from strong economic growth and financial markets.
Some traders may also be questioning the validity of the rally since the unrest in Iran is expected to have no impact on the OPEC member's ability to produce oil.
The U.S. Energy Information Administration reported that U.S. crude stocks fell by 7.4 million barrels in the last week of 2017, exceeding expectations, as refiners boosted activity to their highest rate since 2005.
Lukman Otunuga, analyst at futures brokerage FXTM, struck a similarly cautious tone, saying: "While the current momentum suggests that further upside is on the cards, it must be kept in mind that USA shale remains a threat to higher oil prices". Brent broke through $67 this week for the first time since May 2015.More news: Drawing gives Republicans edge in Virginia House of Delegates
And if the cheating continues, then Sen's worry of a tightening market may not come to pass at all, especially when one factors in US shale continuing its pursuit of energy independence by pumping full out this year.
Norbert Rucker, analyst for Julius Baer, said crude prices above $60 project an "overly rosy picture" and explained that "Oil production disruptions (in Iran) remain a very distant threat.Disruptions in the North Sea have been removed with the Forties Pipeline system having resumed full operations; USA oil production surpassed the 2015 highs in October and is set to climb to historic highs this year". Analysts expect production to top 10 million bpd in the next few weeks and to keep growing, limiting efforts by other producers to cap global supplies.
Canada, Saudi Arabia, and Venezuela were the largest foreign suppliers of crude oil to the U.S.
USA crude oil inventories continued to fall in the week to December 29, with a new decline of 7.4mn barrels (mbs) to reach 424.5 mbs, which is very close to the five year average of 420 mbs. MCX Crude oil futures closed around Rs 3920 per barrel and should see a mixed outing ahead of the weekend.
"Oil production disruptions (in Iran) remain a very distant threat. disruptions in the North Sea have been removed".