Oil hovered close to a 30-month high as civil unrest in Iran heightened concern about potential supply disruptions in OPEC’s third-biggest crude producer.
Futures held above $60 a barrel in New York. In Iran, the death toll mounted amid some of the most violent clashes in years between security forces and protesters. The country pumps about 3.8 million barrels a day. Last week’s 3.3 percent advance in the U.S. oil benchmark capped a 12 percent gain for 2017 as a OPEC, Russia and other major suppliers cooperated to curb a worldwide glut.
“There’s not a lot of bearish news out there right now,” said Phil Flynn, senior market analyst at Price Futures Group in Chicago. “The market is going to settle in” around $60 and likely move higher.
Oil rose in New York last year as the Organization of Petroleum Exporting Countries and its allies trimmed supplies. U.S. crude output has also slipped from a record high, with weekly production falling through Dec. 22 for the first time since mid-October. Any interruption to Iranian supply would be a significant shock to the market.
West Texas Intermediate for February delivery was down 5 cents to $60.37 a barrel at 10:11 a.m. on the New York Mercantile Exchange. In earlier trading, the contract touched $60.74, the highest intraday level since June 2015. Total volume traded was about 25 percent below the 100-day average.
Brent for March settlement fell 20 cents to $66.67 on the London-based ICE Futures Europe exchange, and traded at a premium of $6.26 to WTI for the same month. The global benchmark crude rose about 18 percent last year for a second annual increase.
Though the Iranian unrest that began Thursday in the northeastern city of Mashhad initially targeted the government’s handling of the economy, the focus expanded within a day to the religious establishment and state security forces. Accounts varied, but as many as a dozen people may have died.
“I would not be surprised if any outcome of the current crisis would be ultimately negative for the oil price,” said Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt. “Should the protests lead to regime change, it might attract massive new investments and result in higher output.”
U.S. drillers targeting crude kept the rig count unchanged for a second week at 747, Baker Hughes said on Friday. Repairs to a Libyan pipeline damaged on Dec. 26 were completed Saturday and delivery of oil to the Es Sider terminal has resumed, according to a person directly involved with the matter. The North Sea’s Forties Pipeline System, which carries crude used to price the Dated Brent benchmark, is fully operational after being shut early last month following the discovery of a crack. Russia’s oil industry continued its long-term expansion last year, with annual average production hitting a record even as President Vladimir Putin joined forces with OPEC to clear a global glut and lift prices.