After capping its second annual gain, oil started 2018 by advancing toward $61 as U.S. drilling activity remained at a standstill following a slip in production and as protests continued in Iran.
Futures climbed 0.4 percent in New York after a 3.3 percent increase last week. U.S. drillers targeting crude kept the rig count unchanged for a second week at 747, Baker Hughes said Friday. The death toll during the unrest in Iran, OPEC’s third-largest producer, rose as security forces clashed with demonstrators rallying in a rare show of displeasure with the country’s leaders.
Oil in 2017 extended its recovery from a low point nearly two years ago as the Organization of Petroleum Exporting Countries and its allies trimmed supply to reduce a global glut. U.S. crude output fell through Dec. 22 for the first time since mid-October, slipping from a weekly record after a nine-week expansion.
“There is some momentum for oil at the moment and that could continue,” said Ric Spooner, a Sydney-based analyst at CMC Markets. “There appears to be a developing consensus that the increase in U.S. shale production this year may not be as significant as many had forecast.”
West Texas Intermediate for February delivery was at $60.63 a barrel on the New York Mercantile Exchange, up 21 cents, at 7:40 a.m. in London. Total volume traded was about 17 percent above the 100-day average. Prices added 58 cents to $60.42 on Friday, ending the year up more than 12 percent.
Brent for March settlement gained 31 cents, or 0.5 percent, to $67.18 a barrel on the London-based ICE Futures Europe exchange. Front-month prices rose about 18 percent last year for a second annual increase. The global benchmark crude traded at a premium of $6.52 to March WTI.
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.
Repairs to a Libyan pipeline damaged on Dec. 26 were completed Saturday and pumping 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 benchmark Dated Brent, is fully operational after being shut early last month due to the discovery of a crack.