Oil prices rose on Monday as investors focused on the impact of US sanctions on Iran despite assurances by Washington that Saudi Arabia, Russia and the United States could together raise output fast enough to offset falling supplies.
In July, Saudi Arabia saw its highest crude oil stocks draw in eight months at 5.51 million barrels, after the Kingdom unexpectedly reduced its production compared to June while it kept exports stable, S&P Global Platts reported on Tuesday, citing data by the Joint Organizations Data Initiative (JODI).
Refineries in the United States consumed about 17.7-million barrels a day of crude oil last week while China's refiners used about 11.8-million barrels a day in August, according to government data from the countries, the most among the world's countries.
OPEC Secretary-General Mohammed Sanusi Barkindo says that "Iran is not only a founding member of OPEC, it's a very important member of this organization".
US oil futures surged almost 2 percent on Wednesday as they were bolstered by a fifth weekly crude inventory drawdown and strong domestic gasoline demand amid ongoing global supply concerns over USA sanctions on Iran that come into force in November.
Brent may fall more than $1 to $76.37 a barrel while WTI crude prices may revisit the September 14 low of $67.94, he wrote.
Ministers from Opec and non-Opec producers meet on Sunday to discuss compliance with output policies. Washington aims to cut Iran's oil exports down to zero to force Tehran to re-negotiate a nuclear deal. According to reports, Iran's crude exports are already falling as the US prepares to curb Tehran's ability to sell oil and participate in global financial markets.
U.S. Energy Secretary Rick Perry told Reuters at the weekend that he did not expect any price spikes and that Saudi Arabia, the U.S and Russian Federation could between them raise global output in the next 18 months.
He did not specify how crude producers would compensate for declining exports from Iran, with new USA sanctions due to hit the Islamic republic´s oil industry on November 4.
US President Donald Trump on Monday said he would impose 10 percent tariffs on about $200 billion worth of Chinese imports.
Saudi Arabia has mentioned several times recently that they have no desire to push oil prices over $80/barrel, a move higher may be unavoidable as U.S. sanctions on Iran are set to come into effect beginning November 4th.