Oil prices at highest since November due to Iran sanctions and Libya fighting

Oil prices reached a five-month high on Monday, following oil cuts and unrest in the Middle East, markets have reported.

Brent crude futures stood at nearly $71 a barrel on Monday, up from almost $50 in December, while US West Texas Intermediate was at $63 a barrel, according to Reuters.

It follows a decision by the OPEC oil cartel and non-member Russia to cut production by 1.2 million barrels per day, to shore up sluggish prices.

Added to this was political and economic turmoil in Venezuela, US sanctions on Iran, and fighting in Libya, which intensified last week following an offensive on the capital Tripoli by rogue General Khalifa Haftar.

"OPEC's ongoing supply cuts and US sanctions on Iran and Venezuela have been the major driver of prices throughout this year," Hussein Sayed, chief market strategist at futures brokerage FXTM, told Reuters.

"However, the latest boost was received from an escalation of fighting in Libya which is threatening further supply disruption."

Despite the current highs, some analysts believe that prices could stabilise in the coming months, particularly when the OPEC cuts agreement expires in July with Russia said to be eager to ramp up production.

Meanwhile, Saudi Arabia's Energy Minister Khalid al-Falih said on Monday

"I think the market is moving towards balance," he said, adding that he "did not think [Riyadh] need to" make further cuts.

OPEC and non-members will meet in May and June, when they will likely make a final decision on whether to extend the cuts, although Falih said producers had been sticking to their quotas which has helped prices rise. 

"The implementation once again is moving in the right direction ... the market is coming back to health," Falih said.

Oil prices crashed in 2014 and 2015 when a variety of factors saw crude plummet from over $100 a barrel to under $25.

Fears of a trade war between China and the US, and deeper sanctions on Iran, have led to fears among producers that prices could sink again.