Oil prices notched another three-year high on Wednesday, with U.S. benchmark crude settling above $63 a barrel after U.S. government data revealed an eighth-straight weekly decline in U.S. crude stockpiles, along with a sizable decrease in domestic crude production.
February West Texas Intermediate crude tacked on 61 cents, or 1%, to settle at $63.57 a barrel on the New York Mercantile Exchange after touching an intraday high of $63.67. It saw the highest finish since Dec. 9, 2014, according to FactSet data.
March Brent gained 38 cents, or 0.6%, to $69.20 a barrel—another settlement at a three-year high.
The U.S. Energy Information Administration on Wednesday reported that domestic crude supplies fell by 4.9 million barrels for the week ended Jan. 5. That was more than the 3.5 million-barrel decline forecast by analysts surveyed by S&P Global Platts, but the American Petroleum Institute on Tuesday had reported a decline of 11.2 million barrels.
“Crude inventories have started this year where they left off last year: dropping,” said Matt Smith, director of commodity research at ClipperData. Crude supplies began their eight-week streak of declines just before Thanksgiving.
The EIA also said gasoline stockpiles rose 4.1 million barrels for the week, while distillate stockpiles added 4.3 million barrels. The S&P Global Platts survey forecast a supply rise of 2.3 million barrels for gasoline and an increase of 2.1 million barrels for distillates.
On Nymex, February gasoline fell by 0.2% to $1.833 a gallon, while February heating oil added 0.7% to $2.081 a gallon.
Total U.S. crude production, meanwhile, fell by 290,000 barrels to 9.492 million barrels a day last week, according to the EIA.
Despite nearly two months of falling U.S. oil supply, domestic production had been climbing “closer and closer to 10 [million barrels a day],” said John Macaluso, an analyst at Tyche Capital Advisors.
He believes the latest output decrease would have had a “heavier impact if technical indicators weren’t showing prices running a bit hot,” with crude oil having already seen a more than 13% run higher since early December.
But Rob Haworth, senior investment strategist for U.S. Bank Wealth Management, said that “if shale producers are able to ramp up production meaningfully in light of relatively higher prices, or if [the Organization of the Petroleum Exporting Countries] is unable or unwilling to sustain production cuts in the face of such high prices,” oil prices may settle back into prior trading ranges.
Concerns over unrest in Iran have helped push oil up in recent sessions, along with a decline in the number of U.S. oil-drilling rigs. A wave of protests against the government and the general economic situation have swept across Iran in recent weeks, with reports that at least 21 people have died and thousands have been detained, according to The Washington Post .
Supporting the market further on Tuesday, the EIA in its monthly outlook report raised its 2018 price forecasts on WTI to $55.33 and Brent crude to $59.74.
Rounding out action in the energy market, February natural gas shed 0.6% to $2.906 per million British thermal units, pulling back after a 3.1% rise a day earlier.
The EIA on Thursday is forecast to report a weekly drop of 337 billion cubic feet in U.S. natural-gas supplies—roughly double the five-year average for this time of year, according to S&P Global Platts.
—Victor Reklaitis and Biman Mukherji contributed to this article