Oil climbed to the highest level in more than two years on estimates that U.S. crude stockpiles fell for a seventh week, while unrest continued in OPEC’s third-biggest producer.
Futures rose as much as 0.9 percent in New York, approaching $61 a barrel. U.S. inventories probably fell by 5 million barrels last week, according to a survey before a government report on Thursday. In Iran, about 20 people have been killed since the turmoil broke out last week, though crude and condensate exports remain unaffected, Bloomberg tanker tracking shows.
Oil has risen for two years running as the Organization of Petroleum Exporting Countries and its allies trimmed supply to reduce a global glut. Prices will probably trade between $40 and $60 a barrel this year, penned in by rising U.S. shale production, declining but still ample worldwide supplies and eroding OPEC compliance, according to Moody’s Investors Service.
“The U.S. shale-OPEC tug of war will simultaneously cap upside price potential and downside risks,” said Stephen Brennock, an analyst at PVM Oil Associates Ltd. in London.
West Texas Intermediate for February delivery was at $60.87 a barrel on the New York Mercantile Exchange, up 50 cents, at 1:30 p.m. London time. Total volume traded was about 12 percent below the 100-day average.
Brent for March settlement rose 45 cents to $67.02 a barrel on the London-based ICE Futures Europe exchange after losing 30 cents on Tuesday. The global benchmark crude traded at a premium of $6.19 to March WTI.
Unrest in Iran began Dec. 28 with a rally against the government’s handling of the economy, before turning into a wider protest against the political establishment. The OPEC nation pumped 3.82 million barrels a day in November, according to data compiled by Bloomberg.
OPEC member Iraq exported a record 3.535 million barrels of oil a day in December, its oil ministry said in a statement. Oil prices will continue to recover in 2018 as demand beats growth from U.S. shale supplies, Sanford C. Bernstein analysts wrote in a report.