Oil prices hit a fresh three-year high on Thursday ahead of a U.S. decision on whether to extend temporary waivers on sanctions against Iran.
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Brent crude, the global oil benchmark, rose 0.3% to $69.40 a barrel on London's ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 0.5% at $63.88 a barrel.
U.S. President Donald Trump is set to review whether to waive or reimpose sanctions on Iran this week, a decision that has implications on Iran's oil exports.
"It will be very important for the oil market to see what he does with Iran considering that in the past sanctions regime a large portion of exports was disrupted," said Giovanni Staunovo, commodity analyst at UBS Wealth Management.
The review comes after Iran has faced two weeks of antigovernment protests, after its economy didn't benefit to the extent expected from the lifting of international sanctions two years ago.
Mr. Staunovo said oil was rising on a combination of factors including geopolitical risks, falling output in Venezuela and shrinking inventories in the U.S.
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On Wednesday, the U.S. Energy Information Administration reported that crude oil stocks fell by almost 5 million barrels in the week ended Jan. 5.
Analysts said that the higher oil price could incentivize cheating by members of the Organization of the Petroleum Exporting Countries, which agreed late last year to extend production cuts through 2018 to drain global stocks. The pact included some non-OPEC countries such as Russia.
On Wednesday, OPEC members Iran and Iraq cut their official selling prices to Asia, indicating a desire to increase sales to the region.
"Iraq's attitude towards the OPEC/non-OPEC supply cut deal has been problematic ever since the agreement came into effect as the country's compliance is really poor," said Tamas Varga, analyst at brokerage PVM.
Nymex reformulated gasoline blendstock--the benchmark gasoline contract--rose 0.1% to $1.83 a gallon. ICE gasoil changed hands at $615.75 a metric ton, up $2.75 from the previous settlement.
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(END) Dow Jones Newswires
January 11, 2018 05:51 ET (10:51 GMT)