Oil prices inch up as US crude stocks drop, Iran sanctions weigh

SEOUL: Oil markets rose on Wednesday on a drop in US crude inventories and a weaker dollar, while concerns about a potential shortfall in Iranian supply from November due to US sanctions also buoyed prices.
Brent crude oil futures LCOc1 were at $72.90 per barrel at 0653 GMT, up 27 cents, or 0.37 per cent, from their last close.
US West Texas Intermediate (WTI) crude futures CLc1 were up 27 cents, or 0.41 per cent, at $66.11 per barrel.
US crude inventories fell by 5.2 million barrels in the week to August 17 to 405.6 million barrels, ahead of analyst forecasts for a fall of 1.5 million barrels, according to data from industry group the American Petroleum Institute. [API/S]
Official data from the US Energy Information Administration (EIA) is due at 10:30 am EDT (1430 GMT) on Wednesday.
“Investors are also confident that (official) inventories in the United States will decrease this week,” ANZ Bank said in a note.
Signs of slowing US crude output growth and a weaker US dollar also provided some support to oil prices, said Kim Kwang-rae, commodity analyst at Samsung Futures in Seoul.
The US dollar index .DXY against a basket of six major currencies eased on Wednesday to 95.211 after losing 0.7 per cent the previous day, weighed down by US President Trump’s comments on monetary policy.
A weaker US dollar makes oil, which is priced in dollars, less expensive for buyers in other currencies. The EIA cut its 2018 US crude production growth forecast on August 7 to 10.68 million barrels per day (bpd) from 10.79 million bpd amid lower crude prices.
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 dispute 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.
— Reuters