Oil closes above $60 a barrel for the first time in 2.5 years

Oil closes above $60 a barrel for the first time in 2.5 years
Posted at 3:09 PM, Dec 29, 2017

Oil prices closed at their highest level in two and a half years on the final trading day of 2017.

The late spike was driven in part by a pipeline explosion in Libya earlier in the week.

Libya's state-run National Oil Corporation said on Tuesday that the explosion jeopardized output by up to 100,000 barrels a day. The agency has not announced the cause of the blast.

U.S. crude oil prices spiked 1% Friday to more than $60 a barrel, the highest close since June of 2015. Last month, oil prices jumped after the Keystone pipeline shut down following an oil spill.

Still, prices remain low compared with $100-a-barrel prices three years ago.

There's been a glut of oil in recent years, forcing the Saudi-led OPEC cartel to cut production.

Oil crashed in 2014 and 2015 and reached a low of $26 a barrel in 2016. Prices slowly rebounded after OPEC agreed to limit production. In November, the 14-member cartel extended those cuts until the end of 2018.

Libya is one of two OPEC member countries that doesn't have a cap on oil production because of unrest.

OPEC originally tried to flood the market with cheap oil in the face of the U.S. shale boom, but backpedaled on the strategy as it became clear it was waging a losing battle.

With the war against OPEC halted and shale production re-energized, the U.S. is poised forrecord oil output in 2018.

--CNNMoney's Matt Egan contributed to this story.