FILE PHOTO: Excess gas is burnt off at a pipeline at the Zubair oilfield in Basra, Iraq, May 9, 2018. REUTERS/Essam al-Sudani/File Photo
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 <CLc1> 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 <C-OUT-T-EIA> remains around the record of 11 million barrels per day (bpd), recent subdued U.S. drilling activity points towards a slowdown.
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.
(Reporting by Henning Gloystein; editing by Richard Pullin)