Oil prices settled higher Tuesday as uncertainties remain due to USA sanctions on Iran.
Crude oil prices moved up during European trading hours and continued to rise during U.S. trading hours.
US light crude CLc1 closed 35 cents, or 0.5 percent, higher at $71.31 a barrel, also not far off the day's peak at $71.92, its highest since November 2014.
In its monthly Oil Market Report for May released Wednesday morning, the International Energy Agency (IEA) said that global crude supplies held steady in April at roughly 98 million barrels per day. Unless the USA exports can keep up the pace with the production, which has increased by more than 2.3 million barrels per day since bottoming in July 2016, we expect the spread to rise.
China, which is the world's biggest importer of oil, saw refinery runs rise 12 per cent in April compared to the same time previous year to about 12m barrels of oil per day.
Worries had also been growing about the potential reimposition of U.S. sanctions against Iran, which U.S. President Donald Trump announced on May 8, spurring some South Korean buyers to replace imports of Iranian condensate.
OPEC's success with the oil production cutting deal has been to a significant extent aided by Venezuela's catastrophically dropping production as the country grapples with foreign exchange shortage, US sanctions, and a devastating economic crisis.More news: Packers Not Expected To Sign Dez Bryant
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OPEC data presented on Monday showed that crude stockpiles from members of the Organization for Economic Co-operation and Development (OECD) was down to 9 million barrels above the 5-year average and lower than the 340 million barrels above the average in January 2017.
Since the accord was reached at the end of 2016, oil prices have climbed to their highest in almost four years to exceed $77 a barrel, up from $30 in early 2016.
The world's fifth-biggest crude oil importer has increased its imports of Iranian crude, mainly condensate, or an ultra-light oil since sanctions were lifted in 2016.
At the current price, Nigeria generates $33.0 per barrel as excess revenue, amounting to $75.9 million per day.At the current oil price, the excess crude oil account is expected to reach $76 million per day, about 16.2 per cent, up from $65.4 million recorded in April, 2018.
The prospect of a drawdown in crude stocks should be supportive for prices along with the tight global supply situation.
"It is too soon to say what will happen this time, but we should examine whether other producers could step in to ensure an orderly flow of oil to the market and offset a disruption to Iranian exports".
The oil prices remain firm despite the output increase in United States oil rigs, with the experts estimating that the production may continue to rise for next over half-a-dozen months. Sharenow also estimated oil to go beyond the $80 level in the short term.