Oil rises as markets tighten ahead of Iran sanctions

By Henning Gloystein

SINGAPORE (Reuters) – Oil prices rose on Monday as U.S. markets tightened just weeks ahead of Washington’s plan to impose new sanctions against Iran.

Brent crude futures () were at $79.74 per barrel at 0036 GMT, up by 94 cents, or 1.2 percent.

U.S. West Texas Intermediate (WTI) crude futures () rose by 74 cents, or 1.1 percent, to $71.52 a barrel.

The market was “increasingly concerned about dwindling (U.S.) inventories,” ANZ bank said on Monday.

U.S. commercial crude oil inventories are at their lowest level since early 2015. And while output remains around the record of 11 million barrels per day (bpd), recent subdued U.S. drilling activity points toward a slowdown.

(GRAPHIC: U.S. oil drilling, production & storage levels: https://tmsnrt.rs/2OKP4nJ)

The tightening U.S. market came ahead of sanctions that Washington plans to implement against Iran’s petroleum exports from early November, which many analysts expect to result in a drop of more than 1 million bpd of crude exports.

The Middle East dominated Organization of the Petroleum Exporting Countries (OPEC), of which Iran is a member, as well as top producer Russia are discussing raising output by 500,000 bpd to counter falling supply from Iran, although the discussions are not finalised.

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