Oil prices hover near five-month highs as global markets tighten

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SINGAPORE (Reuters) – Oil prices rose to fresh 5-month highs on Tuesday as markets tightened amid OPEC-led supply cuts, U.S. sanctions against Iran and Venezuela, and escalating violence in Libya.

FILE PHOTO: A general view of the El Sharara oilfield, Libya December 3, 2014. REUTERS/Ismail Zitouny/File Photo

International benchmark Brent futures hit their strongest level since last November at $71.34 per barrel, before easing to $71.18 per barrel by 0452 GMT, still 8 cents, or 0.1 percent, above their last close.

U.S. West Texas Intermediate (WTI) crude oil futures also hit a November 2018 high, at $64.77 per barrel, before easing to $64.53, up 13 cents, or 0.2 percent.

Oil markets have tightened this year as the United States imposed sanctions on oil exporters Iran and Venezuela while the producer club of the Organization of the Petroleum Exporting Countries (OPEC) has been withholding supply to prop up prices.

Brent and WTI futures have risen by 40 percent and 30 percent respectively since the start of the year.

Goldman Sachs said an oil supply deficit had opened up early this year.

“We expect the drivers of this deficit to persist through 2Q19” due to a “shock and awe implementation of the