Oil steadies above $60 as protests spread in OPEC producer Iran

Futures were little changed in New York after a 3.3% gain last week. The death toll rose during the unrest in Iran as security forces clashed with demonstrators rallying in a rare show of displeasure with the nation’s leaders. The country pumps about 3.8 MMbpd.

Oil in New York climbed 12% last year as the Organization of Petroleum Exporting Countries and its allies trimmed supply to reduce a global glut. U.S. crude output is also slipping from a record-high, with weekly production falling through Dec. 22 for the first time since mid-October. Any interruption to Iranian supply would be a significant shock to the market.

“Geopolitical risks are clearly back on the crude oil agenda,” said Bjarne Schieldrop, chief commodities analyst at SEB AB in Oslo. “As of yet, there is no deep-seated concern for a disruption” in Iran, but if that were to happen “it would have a huge impact on global crude oil prices.”

West Texas Intermediate for February delivery was at $60.50/bbl on the New York Mercantile Exchange, up 8 cents, at 12:45 p.m. London time. Total volume traded was about 9% above the 100-day average.

Brent for March settlement rose 6 cents to $66.93/bbl on the London-based ICE Futures Europe exchange, and traded at a premium of $6.41 to WTI for the same month. The global benchmark crude rose about 18% last year for a second annual increase.

Though the  Iranian unrest that began Thursday in the northeastern city of Mashhad initially targeted the government’s handling of the economy, the focus expanded within a day to the religious establishment and state security forces. Accounts varied, but as many as a dozen people may have died.

“I would not be surprised if any outcome of the current crisis would be ultimately negative for the oil price,” said Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt. “Should the protests lead to regime change, it might attract massive new investments and result in higher output.”