Oil prices rose Tuesday, as geopolitical risk relating to Iran continued to buoy markets.
Brent crude, the global benchmark, was up 0.1% at $67.86 a barrel on London's Intercontinental Exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 0.3% at $61.90 a barrel.
Traders and oil market observers are waiting to see whether President Donald Trump on Wednesday extends U.S. sanctions relief to Iran as part of the 2015 international agreement to curb the Islamic Republic's nuclear program. Reinstating economic sanctions could limit Iran's oil exports.
"The potential for new sanctions, which could restrict [crude] supply" is supporting prices, said Geordie Wilkes, a research analyst at brokerage Sucden Financial.
Mr. Trump's decision comes on the heels of antigovernment protests in Iran last week, which also boosted the price of crude.
But Mr. Wilkes said he expects the market to consolidate somewhat in the short-term as traders reassess some of the recent factors driving up prices, including the situation in Iran, a drawdown in U.S. crude stocks and strong seasonal demand because of the cold winter in the U.S.
Market bulls have also been buttressed by the Organization of the Petroleum Exporting Countries' continued compliance with a deal to cut crude production. OPEC and 10 members outside the cartel agreed late last year to extend an accord to hold down crude output by nearly 2% through the end of this year.
The agreement, which was implemented at the start of 2017, was meant to rein in the global supply glut and raise prices. The price of Brent has risen roughly nearly 30% over the past year.
"In view of sharply falling U.S. crude stocks and record-high compliance with the production cuts by OPEC, market participants are convinced that the market is continuing to tighten," according to analysts at Commerzbank.
Analysts are looking ahead to the release of the U.S. Energy Information Administration's monthly short-term energy outlook report, which will provide forecasts on U.S. output for this year. On Wednesday, the EIA will release its weekly data on U.S. petroleum inventories.
Among refined products, Nymex reformulated gasoline blendstock--the benchmark gasoline contract--was up 0.8%, at $1.79 a gallon. ICE gasoil, a benchmark for diesel fuel, changed hands at $603.75 a metric ton, up 0.25% from the previous settlement.
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(END) Dow Jones Newswires
January 09, 2018 06:47 ET (11:47 GMT)