Brent crude has risen to its highest price level in almost three years as Opec-led production cuts take effect, global oil stockpiles fall and geopolitical tensions rise, overriding concerns about growing US shale output. The international oil benchmark hit a high of $69.37 a barrel on Wednesday — the highest since May 2015 — with Brent creeping closer to levels last seen in 2014 when the price crash began. The marker eased back to $68.87 in late-afternoon London trading, still up seven cents on the day. “We are in an environment where Opec producers and Russia have reduced their supplies and stocks have seen drawdowns.

At the same time, geopolitical issues are a concern,” said Olivier Jakob, at consultancy Petromatrix. He noted the potential reimposition of sanctions on Iran by the US that has until now been waived. Some analysts, such as Carsten Fritsch at Commerzbank, said recent price rises did not fall in line with underlying fundamentals and risked “overshooting”. But others have said a weaker US dollar and stronger global economic growth figures, which could lead to greater than expected demand for oil, have also supported prices. US government data on inventories published on Wednesday showed a larger than expected 4.9m barrels fall in crude stockpiles for the week ending January 5 to 419.5m barrels.

Separate data from the American Petroleum Institute this week showed a larger drawdown of more than 11m barrels. US crude marker West Texas Intermediate hit its 2014 high on Tuesday and rose a further 33 cents in Wednesday afternoon trading to $63.31 a barrel.