Oil prices hovered just below $61 today as a sharp fall in US fuel stocks and mounting anxiety over Iran's nuclear ambitions spurred buying.
US crude for April delivery was trading 9 cents lower at $60.86 a barrel earlier this morning after gaining 88 cents yesterday and hitting a peak of $61.25, the highest since January 2nd. London Brent crude for April was down 1 cent.
Prices have climbed nearly $2 in two days, boosted first by pipeline and refinery problems in the United States and by yesterday's news of an unexpectedly deep draw on fuel stocks.
US distillate inventories, including heating oil, fell by five million barrels last week, the biggest weekly drop since September 2005 and much larger than the average 2.9 million barrel draw analysts had anticipated, data showed.
Oil traders' fear of a disruption in Gulf supplies grew this week after the United Nations nuclear watchdog said Iran failed to meet a February 21st deadline to suspend uranium enrichment.
Washington said major powers would meet next week to start writing a new Iran sanctions resolution.
A string of US refinery problems and other operational snags also risks straining fuel supplies in the top consumer.
Opec next meets in Vienna on March 15th to discuss output levels, but most members, including top supplier Saudi Arabia, have indicated that the cartel will leave output unchanged.