Oil gains after report shows larger than expected United States stock draws

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U.S. West Texas Intermediate (WTI) crude futures were up 41 cents at $71.90 after also hitting their highest since November 2014, at $72.30 a barrel.

Brent crude futures were at $79.69 a barrel at 0913 GMT, up 39 cents.

Renewed US sanctions on third-largest Opec producer Iran and shrinking supplies from Venezuela have buoyed crude's recent rally.

"The geopolitical noise and escalation fears are here to stay", said Norbert Rücker, head of macro and commodity research at Swiss bank Julius Baer.

US crude inventories (USOILC=ECI) fell by 1.4 million barrels in the week to May 11, compared with analyst expectations for a 763,000 barrel decrease.

ANZ said the falling USA inventories were "raising concerns of tight markets heading into the US driving season", during which demand typically rises.

Analysts say the glut that had weighed on prices for the past three years has finally been eliminated, thanks to strong demand in key markets like China and output cuts by OPEC and its non-cartel partners including Russian Federation.

At $80 per barrel, Asia's thirst for oil costs the region a whopping $1 trillion a year, more than twice what it was in 2015/2016, the two years prior to the OPEC-cuts which started in 2017.

US crude output has soared 27 percent in the last two years to a record 10.72 million barrels per day, putting it within reach of top producer Russia's 11 million bpd.

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Morgan Stanley's report predicts that the Brent price will reach $90 per barrel by 2020 as demand for crude oil skyrockets by 1.5 million barrels a day, supported by the new shipping rules.

"OPEC and Russian Federation have been implementing their policies efficiently", Pouyanne said, referring to the Organisation of the Petroleum Exporting Countries' efforts to clamp down on supply.

India, the third-largest consumer of oil after the US and China, would be especially hard-hit if prices keep rising.

"The recent jump in oil prices will take its toll", said the agency.

The Paris-based IEA cut its forecast for global demand growth to 1.4 million barrels per day for 2018, from a previous estimate of 1.5 million bpd.

Analysts pointed out that the oil market remained relatively calm as there was no new catalyst on Thursday, but uncertainties remain due to US sanctions on Iran.

"The potential double supply shortfall represented by Iran and Venezuela could present a major challenge for producers to fend off sharp price rises and fill the gap, not just in terms of the number of barrels but also in terms of oil quality", it said.

Opec and other producers such as Russian Federation have restrained supplies in support of higher prices.

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