Oil clung to gains as political tensions in Iran and declining exploration work in the U.S. imperiled production growth.
Futures hovered just below the $62-a-barrel mark in New York after climbing to a three-year high last week. A simmering power struggle in Iran has raised anxieties over the stability of OPEC’s third-largest crude producer. Meanwhile, U.S. explorers cut the number of rigs searching for oil last week by the biggest margin in two months.
“There is still some support in the market from the situation in Iran,” John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund, said by telephone. “It has the market a bit on edge.”
Oil has held above $60 a barrel since December in New York with U.S. crude stockpiles contracting and American oil drilling stalling out. Output curbs by the Organization of Petroleum Exporting Countries and allied suppliers have buoyed prices, with producers promising to continue the curbs for all of 2018.
West Texas Intermediate for February delivery added 23 cents to $61.67 a barrel at 10:09 a.m. on the New York Mercantile Exchange. Total volume traded was about 11 percent below the 100-day average.
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Brent for March settlement climbed 8 cents to $67.54 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a premium of $6.09 to March WTI.
In the U.S., drillers are seeking to do more with less in a bid to boost profits. Their money-saving moves include opening already-drilled wells by fracking them rather than deploying more rigs to start new ones.
“A drop in active oil rigs is usually bullish for oil prices,” said Michael Poulsen, an analyst at Global Risk Management Ltd.