JOHANNESBURG - Oil extended gains above $62 (R766.95) a barrel before US government data forecast to show crude stockpiles declined for an eighth week and as political tensions kept on simmering in Iran, Opec’s third-biggest producer.
Futures added as much as 1.3% in New York to the highest intraday level in almost three years.
US inventories probably fell by 3.75 million barrels last week, according to a survey before an Energy Information Administration report today.
Iran’s President Hassan Rouhani said on Monday that the anger that led to a week of anti-government protests exposed the need for the freedoms he has championed, as well as a stronger economy.
Oil had its best start to a year in five years as Opec and its allies continue supply cuts to drain a global glut.
Trimming rigs
US drilling has continued to slow down, with explorers trimming the number of rigs targeting crude last week by the most since November.
“Opec supply cuts are continuing and there are some concerns around Iran providing some strength to oil,” said Jonathan Barratt, chief investment officer at Ayers Alliance Securities in Sydney. Rigs counts are declining, but healthy shale output should keep a ceiling on the price.”
West Texas Intermediate (WTI) for February delivery gained as much as 83cents to $62.56 a barrel on the New York Mercantile Exchange, the highest intraday price since May 2015, and traded at $62.16 at 2.59pm in Hong Kong yesterday.
Total volume traded was about 64percent above the 100-day average.
Prices climbed 29c to $61.73 on Monday after rising 1.7% last week, the best start to a year since 2013.
Brent for March settlement gained as much as 51c, or 0.8%, to $68.29 a barrel on the London-based ICE Futures Europe exchange after adding 0.2% on Monday.
The global benchmark crude traded at a premium of $6 to March WTI.
US crude stockpiles at Cushing, Oklahoma, the delivery point for WTI, and the nation's biggest oil-storage hub, probably fell by 1.5 million barrels last week, according to a forecast.
Inventories slid below 50 million barrels until the week that ended on December 29, the first time below that level since February 2015, according to EIA data.