Oil prices held steady on Wednesday, supported by a report of rising U.S. crude inventories as well as the introduction of sanctions against Iran.
Front-month U.S. West Texas Intermediate (WTI) crude futures were at $69.21 per barrel up 4 cents from their last settlement, while the Brent crude oil futures were at $74.63 per barrel, down two cents after a 90 cent gain in the previous session.
“Crude oil prices rose as the reality of U.S. sanctions on Iran weighed on sentiment. News from key buyers suggests the market is already adjusting to the new regime,” ANZ bank said in a note on Wednesday.
The U.S. government introduced a raft a new sanctions against Iran on Tuesday, targetting Iran’s purchases of U.S. dollars – in which oil is traded – metals trading, coal, industrial software and its auto sector.
From November, Washington will also target Iran’s petroleum sector.
Iran is a major exporter of crude oil, shipping out almost 3 million barrels per day (bpd) of crude in September, equivalent to around 3 percent of global demand.
Beyond the sanctions, the oil market was focusing on the U.S. market, where the American Petroleum Institute said on Tuesday that crude inventories fell by 6 million barrels in the week to August 3 to 407.2 million.
In terms of production, the EIA on Tuesday slightly cut its 2018 expectation for average 2018 U.S. crude output to 10.69 million bpd, down from its previous estimate of 10.79 million bpd.