Oil cracks $68 for the first time in 3 years

Oil cracked $US68 a barrel for the first time in three years Wednesday after reports of a big drop in US crude inventories.

West Texas Intermediate surged more than 2%, trading at $US68.14 per barrel around 11:31 a.m – a level not seen since late 2014. Brent, the international benchmark, also soared, trading up about 1.50% to $US72.49.

The rally comes on the back of oil supply concerns. The US Energy Information Administration released a report showing oil inventories in the US fell by 1.1 million barrels last week to about 428 million barrels.

Recent signals that OPEC could extend supply cuts into next year are also pushing prices up.

Saudi Arabia told sources they are targeting a crude price of $US80 or even $US100, Reuters reported Wednesday. That could be a hint that OPEC will keep capping oil production after the current deal expires in December.

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