Oil prices climb lower US crude inventories, threatening Iran's sanctions

SINGAPORE (Reuters) – Oil prices rose on Wednesday after a report said stocks of crude oil in the United States fell and sanctions against Iran raised fears of tight supplies.

The United States West Texas Intermediate (WTI) CLc1 futures were at $ 69.81 per barrel at 0047 GMT, up 56 cents or 0.8% from their latest settlement. WTI futures gained 2.5% in the previous session.

Brent LCoC1 futures prices rose 24 cents, or 0.3%, to $ 79.30 per barrel. Brent climbed for four consecutive days and gained 2.2% in the previous session.

"Oil prices have jumped from day to day as the American Petroleum Institute's inventory data indicates a significant inventory pullback," said William O'Loughlin, investment analyst at Rivkin Securities. in Australia.

US crude inventories fell 8.6 million barrels during the week, from 7 to 395.9 million barrels, said Tuesday the American Petroleum Institute (API), a private industrial group.

The official weekly government data will be released Wednesday by the United States Energy (EIA).

Outside the United States, traders have been looking into the impact of US sanctions against Iran that will target oil exports starting in November.

Washington has lobbied other governments to reduce their imports as well, and many countries and businesses are already aligning and reducing their purchases, triggering expectations of market tightening.

FRAGILE MARKET

Russian Energy Minister Alexander Novak warned on Wednesday of the impact of US sanctions against Iran.

"This is a huge uncertainty in the market – how countries that buy nearly 2 million barrels a day of Iranian oil will act. The situation must be closely monitored, the right decisions must be made, "he said.

Novak said global oil markets were "fragile" because of geopolitical risk and supply disruptions, but added that his country could increase production if needed.

"This is because not all countries have been able to restore their markets and their production," he said, referring to failures and falling production in Mexico and Venezuela.

If markets overheat and prices soar, Novak said Russia could increase production.

"Russia has the potential to increase its production by 300,000 barrels (per day) in the medium term, in addition to the level of October 2016," he said.

This month, Russia produced 11 247 million barrels a day, a record for the post-Soviet Union.

Hurricane Florence, off the United States, has also pushed up crude prices due to rising demand for gasoline and diesel. The storm is expected to hit the east coast of the United States on Friday and cause fuel shortages, as millions of households and businesses have been evacuated.

First-month gasoline futures rose 0.5% on Wednesday, while fuel oil futures rose 0.4%.