Oil futures edged up on Wednesday’s session as it was given a lift by strong global demand and the ongoing tensions happening in the Middle East. However, growing production in the U.S. is hindering the efforts of OPEC to reduce output.
International benchmark for oil prices London Brent crude rose as high as 0.4 percent or 24 cents to settle at $67.66 a barrel. Meanwhile, U.S. West Texas Intermediate (WTI) crude prices were also 0.4 percent higher on the day, adding about 28 cents to finish at $63.82 a barrel.
Preeminent global oil and gas consultancy Facts Global Energy (FGE) said that there are possibilities that the United States will reimpose sanctions on Iran. This might result in a drop about 250,000 to 500,000 barrels per day (bpd) by the end of 2018. Oil analysts are suggesting that a sluggish U.S. dollar and a healthy economy can highly influence oil prices.
Mohammed bin Salman, crown prince of Saudi Arabia, had arrived in Washington for a state visit. This raised expectations that the U.S. will reimpose sanctions in Iran sooner than expected after the resumed criticisms on the nuclear deal last 2015. AxiTrader chief market strategist Greg McKenna said the Saudi Crown Prince MBS appearance is the main driver of the oil market.
According to the American Petroleum Institute in the previous day, crude stocks in the United States dropped by 2.7 million barrels in the week to 425.3 million. Meanwhile, oil output in the nation jumped more than 10.38 million bpd since mid-2016.