Yemisi Izuora
Oil prices rose on Wednesday, supported by a drop in U.S. crude inventories, while a potential shortfall of Iranian oil from November due to U.S. sanctions added to the positive tone.
Brent crude oil futures were at $72.80 per barrel up 18 cents, or 0.25 percent, from their last close, while the U.S. West Texas Intermediate (WTI) crude futures were up 26 cents, or 0.39 percent, at $66.10 per barrel.
U.S. crude inventories fell by 5.2 million barrels in the week to Aug.17, to 405.6 million barrels, ahead of analysts’ forecasts for a fall of 1.5 million barrels, according to data from industry group the American Petroleum Institute, API.
“Investors are also confident that (official) inventories in the United States will decrease this week,” ANZ Bank said in a note.
Concerns also remain over how much oil will be removed from global markets by renewed sanctions on Iran, despite worries that demand growth could weaken amid a trade disputes between the United States and China, the world’s two biggest economies.
“The Iran issue continues to occupy traders’ minds,” said Greg McKenna, chief market strategist at futures brokerage AxiTrader.
Iran, a member of the Organization of the Petroleum Exporting Countries, OPEC, and OPEC’s third-largest oil producer, said earlier this week no other OPEC member should be allowed to take over its share of oil exports.
Meanwhile, a Chinese trade delegation is in Washington this week to discuss trade disputes with the U.S. side. But signs of a thaw were unlikely as U.S. President Donald Trump told Reuters in an interview on Monday that he did not expect much progress.