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By Stephanie Kelly
NEW YORK (Reuters) – US oil prices rose to a three-and-a-half year high on Thursday, bolstered by US supply penalties from Iran.
U.S. West Texas Intermediate (WTI) futures futures rose 80 cents to $ 73.56 a barrel, a 1.1 percent gain, by 1:35 p.m. EDT (1735 GMT). It reached $ 74.03 in the session, the highest since Nov. 26, 2014.
Brent crude future fell 1 cent to $ 77.61 a barrel.
The United States this week demanded countries halt imports of Iranian oil from November, a hardline position Trump administration hopes to cut off funding to Tehran.
On Thursday, officials said they would work with countries on a case-by-case basis. China, the biggest importer of Iran's oil, has not committed to the US position.
"The sanctions are trying to isolate Iran a bit more," said said Mark Watkins, Regional Investment Strategist at US Bank Wealth Management.
"If you're having Iran's oil taken off the market, then you have a decrease in supply and by all means, that's going to put pressure on the price of oil to move up."
The US demands follow a decision by the Organization of the Petroleum Exporting Countries last week to increase production to more than 40 percent over the last year
OPEC and other producers.
Unplanned supply disruptions from Canada to Libya and Venezuela also have supported prices.
US crude futures also extended after the Cushing, Oklahoma, delivery hub fell by 3.1 million barrels in the week through June 26, traders said, citing data from market intelligence firm Genscape.
Front-month WTI's premium to the second month is $ 1.81, while US crude is down to $ 3.92 a barrel.
Not all indicators point towards an ever-tightening market. US crude production is approaching 11 million barrels per day (bpd), and Saudi Arabia expects to match that in
But badysts say the market has little spare capacity to deal with further disruptions. inventories still declining and spare capacity uncomfortably low, caused by rising geopolitical risks, "ANZ bank said.
(Additional reporting by Christopher Johnson in London and Henning Gloystein in Singapore; Editing by Marguerita Choy, Alexandra Hudson and Diane Craft)
(This story has been edited by Business Standards and is self-generated from a syndicated feed.)
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