US crude futures fell 44 cents, or 0.71%, to $61.57 a barrel on the New York Mercantile Exchange.
Further gains will be hard to come by as US production threatens to undermine the Organization of Petroleum Exporting Countries' attempt to cut down the global supply glut.
"Geopolitical risks are clearly back on the crude oil agenda after having been absent nearly entirely since the oil market ran into a surplus in the second half of 2014", Bjarne Schieldrop, chief commodities analyst at SEB, said, also citing Kurdistan and Libya.
"The protests in Iran add more fuel to the already bullish oil market mood", said Norbert Ruecker, head of commodity research at Swiss bank Julius Baer. There's no doubt that the ten-dollar move... It's likely that the market will have fully rebalanced by mid-2018, fast-forwarding OPEC's exit from production cuts to the second half of the year, according to Goldman Sachs.More news: A-list actresses bring activists to Golden Globes red carpet
As we roll into 2018, the higher oil prices continue to drive increased USA shale production, and set the stage for yet another year of the OPEC-shale tug-of-war that will influence the price of oil.
Gasoline stocks in the US are expected to grow by 2 million barrels a week, distillates - by 1.3 million barrels. United States crude settled up 38 cents at $62.01, after earlier hitting $62.21, its highest since May 2015.
The group's compliance with the deal, which impressed most traders in 2017, will also be closely monitored to see if members' taps start to loosen under the allure of higher prices.
Despite relatively high US crude oil production, curtailments in production by members of the Organization of the Petroleum Exporting Countries (OPEC) and robust global demand supported crude oil price increases in 2017, EIA said.
Meanwhile, the United States has largely managed to ride out the sharp fall in the price of oil over the past three years after Opec, led by Saudi Arabia, launched a price war in 2015.More news: Health Care Advocates See Missed Opportunity In Brown's Proposed Budget
Wednesday evening the American Petroleum Institute (API) reported that crude inventories fell by about 5.0 million barrels in the week ending December 29.
OPEC led cuts are assisting to reduce global inventories.
OPEC does not officially set a target price for crude, but reportedly in February past year its biggest producer, Saudi Arabia, was aiming for a $60 barrel.
OPEC meets again on 20 June 2018, and if crude is still at $60 then Graham-Wood thinks a $75 year-end may be a realistic possibility. The agency reported a 7.4 million decline in crude barrels for the ended December 29, but said gasoline inventories rose by 4.8 million barrels and distillate stocks climbed by 8.9 million barrels, as refineries increased utilization rates.More news: Economists advise Modi on farm incomes, fiscal & jobs
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