Oil prices rallied above $60 for the first time in a month today before paring some gains, lifted by signs of falling crude exports from producer group OPEC and an outage at a US oilfield.
US crude oil futures gained 21 cents to $59.92 a barrel earlier today, after hitting the highest since January 3rd. London Brent crude was up 5 cents to $59.09. OPEC's exports in January were down 200,000 barrels per day (bpd) from December, shipping data from Lloyd's Marine Intelligence Unit showed, bringing the cartel closer to its pledged supply cut of 1.2 million bpd from November.
The group's exports are expected to edge even lower in February, when OPEC planned to cut another 500,000 bpd, oil consultancy Oil Movements said in a separate report. Adding to the rally was a force majeure on oil and gas supplies by independent producer Occidental Petroleum from its field in Elk Hills, California, after it shut 95 per cent of its 120,000 barrels of oil equivalent a day following a fire.
Traders said increased tension between the United States and OPEC producer Iran was adding to buying support. Iran's top authority, Supreme Leader Ayatollah Ali Khamenei, said yesterday the Islamic Republic would target U.S. interests worldwide if it came under attack over its nuclear programme.
Iran, the world's fourth-largest oil exporter, and the United States are locked in a war of words over Tehran's nuclear programme, which Washington says is being channelled into bomb-building, a charge Tehran denies. Washington reaffirmed it will stick to firm diplomacy in order to avoid war with Iran.