Oil prices rose on Wednesday, supported by a drop in U.S. crude inventories and a weaker dollar, along with concerns about a potential shortfall of Iranian oil from November due to U.S. sanctions.
Brent crude oil futures were at $72.83 per barrel at 0234 GMT, up 20 cents, or 0.3 percent, from their last close.
U.S. West Texas Intermediate (WTI) crude futures were up 28 cents, or 0.4 percent, at $66.12 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.
Official data from the U.S. Energy Information Administration (EIA) is due at 10:30 a.m. 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 U.S. crude output growth and a weaker U.S. dollar also provided some support to oil prices, said Kim Kwang-rae, commodity analyst at Samsung Futures in Seoul.
The U.S. dollar index against a basket of six major currencies eased on Wednesday to 95.211 after losing 0.7 percent the previous day, weighed by U.S. President Trump’s comments on monetary policy.
A weaker U.S. dollar makes oil, which is priced in dollars, less expensive to buyers in other currencies.
The U.S. Energy Information Administration last week cut its 2018 U.S. crude production growth 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 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 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. (Reuters)