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Oil Tops Three-Year High amid EIA Report, Iran Protests

January 4, 2018 at 18:00 by Andrew Moran

Oil futures are trading at their best levels in more than three years. Amid a new US government report, the demonstrations continuing in Iran, and a cold snap in the US, oil prices are trading well above $60 per barrel.

February West Texas Intermediate (WTI) crude futures rose $0.43, or 0.70%, to $62.06 per barrel at 16:43 GMT on Thursday on the New York Mercantile Exchange. US crude prices are on track to settle at their highest levels since December 2014.

Brent, the international benchmark for oil prices, is also climbing higher towards the end of the trading week. February Brent crude futures jumped $0.19, or 0.28%, to $68.03 a barrel on London’s ICE Futures exchange. Brent prices are hovering around three-year highs.

According to the US Energy Information Administration (EIA), domestic crude stockpiles declined by 7.4 million barrels for the week ending December 29, while oil output surged 28,000 barrels per day (bpd) to 9.8 million bpd. Gasoline stockpiles increased by 4.8 million barrels, while distillate stockpiles soared by 8.9 million barrels.

The Iranian conflict is further aiding oil’s increase. With anti-government demonstrations continuing, which have left more than 20 dead, they could disrupt crude output. Iran is Organization of the Petroleum Exporting Countries (OPEC)’s third-largest producer, and it could impact international supplies and prices. So far, the nation’s daily crude oil loadings have remained unaffected – since the protests are reportedly about economics, a hit to crude output could further strain the economy.

Crude futures are getting some help from Old Man Winter as a cold snap has impacted many parts of the US. With historically low temperatures, there has been greater demand for fuel for heating, but experts are warning that it may trigger supply disruptions. February natural gas futures tumbled 0.1% to $3.005 per million British thermal units, while February gasoline futures dipped 0.3% to $1.793 a gallon.

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