NEW YORK (Reuters) – Oil climbed above $61 to a 2007 high on Friday following a sharp drop in fuel stocks in the United States, as tensions over Iran’s nuclear program stoked supply concerns.
U.S. crude settled up 19 cents at $61.14 a barrel after trading as high as $61.80, the highest level since December 26.
London Brent crude rose 26 cents at $60.88.
Weekly government storage data released on Thursday showed a sharp decline of 3.1 million barrels in U.S. gasoline stocks last week, stoking concern ahead of summer driving season.
Refinery glitches also have stoked concerns in the world’s top energy consumer, and nine tankers of European gasoline were headed to U.S. shores to take advantage of higher prices.
“The latest data suggests to us that the tightening dynamic which had emerged over the past few weeks is continuing,” said Kevin Norrish, an analyst at Barclays Capital, adding that gasoline demand was showing surprising strength.
More defiant words from Iran’s president over the OPEC nation’s nuclear program also unsettled the market.
“If we show weakness in front of the enemy the expectations will increase but if we stand against them, because of this resistance, they will retreat,” said President Mahmoud Ahmadinejadsaid.
Tehran ignored a February 21 United Nations deadline to stop enriching uranium.
The five permanent members of the U.N. Security Council plus Germany will meet next week to discuss possible further steps against the world’s No. 4 oil exporter. The United Nations already has imposed sanctions barring transfer of nuclear technology and know-how.
Strength in energy also is part of a broader commodity rally, Petromatrix analyst Olivier Jakob noted, with corn, wheat, metals and sugar all on the march in recent days.
“The range on crude oil has now been broken and … the positive momentum is back into oil and should attract further investment,” Jakob said.
“With the path of the events drifting toward a more confrontational outcome we expect geopolitics, and Iran in particular, to remain an important supportive factor for oil prices going forward,” said Norrish.