Oil hovers near 4-1/2 year high on tightening supplies

Oil prices continue to rally as supply tightens and demand remains strong, with both U.S. crude and the international benchmark, Brent crude, climbing to their highest prices since November 2014.

U.S. crude oil edged above $72 a barrel Thursday while Brent crude was trading near $80 a barrel.

As oil prices rise, American drivers are paying more at the pump. The national average for gas prices, as of Thursday, was $2.90 per gallon. This comes just as the traditional peak driving season, which runs from the Memorial Day weekend through the Labor Day weekend is about to kick off. According to AAA, the highest recorded gas price was $4.11.

Andrew Lebow, a senior partner at Commodities Research Group, told FOX Business last week that once gas hits $3.00 per gallon, consumers generally change their behavior to decrease their fuel consumption.

While oil prices are rising, the International Energy Agency (IEA) said on Wednesday that it had lowered its global oil demand growth forecast for 2018 to 1.4 million barrels per day (bpd) from 1.5 million bpd.

The Paris-based organization added that although supplies currently stand at 98 million bpd due to supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC), that strong non-OPEC growth in oil will lead the market to grow 1.87 million bpd in 2018.