U.S. crude stocks fell by 8.6 million barrels in the week to September 7 to 395.9 million, the American Petroleum Institute (API) said on Tuesday, while the U.S. Energy Information Administration (EIA) cut its forecast for U.S. crude output growth in 2019.
Oil prices could soon rise above $80 a barrel as American sanctions on Iran move closer, Venezuelan production falls and Libyan supplies face disruption, the International Energy Agency has warned.
"The price range for Brent of $70-$80 per barrel in place since April could be tested".
"Market participants are now evaluating this development in conjunction with potential for further declines in oil output from Iran and Venezuela, which portrays a significantly bullish picture on prices", said Abhishek Kumar, senior energy analyst at Interfax Energy in London.
USA crude stocks fell by 8.6 million barrels in the week to September 7 to 395.9 million, the American Petroleum Institute (API) said on Tuesday.
Brent crude futures slipped 38 cents, or 0.5 per cent, to $79.36 a barrel.
Since spring, when the Trump Administration said it would impose sanctions on Iran, traders have been focusing on the impact they could have on global supply. This comes amid the Iranian oil sanctions which are set to be imposed on November 4th, while the United States have also demanded nations to drop Iranian imports to zero. "This is a huge uncertainty on the market - how countries, which buy nearly 2 million barrels per day of Iranian oil, will act".More news: Ericsson strengthens end-to-end transport solutions for 5G
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"This is a huge uncertainty on the market how countries, which buy nearly 2 million barrels per day (bpd) of Iranian oil, will act".
The Wall Street Journal said OPEC's total oil production climbed last month, in a sign the oil cartel is sticking with a decision to begin pumping out more barrels of crude this summer after more than a year of holding back output.
The Organization of the Petroleum Exporting Countries (OPEC) on Wednesday reduced its forecast for 2019 global oil demand growth, pointing to economic risks.
But it said rising demand could also be checked.
As Middle East markets tighten, Asian buyers are seeking alternative supplies, with South Korean and Japanese imports of USA crude hitting a record in September. The IEA said crude output fell in August by 150,000 bpd from July to a 25-month low of 3.63 million bpd, while exports fell by 280,000 bpd to 1.9 million bpd, from a peak of around 2.5 million bpd in May.
WTI was pushed over $70 during the previous session due to falling crude inventory and production levels.