Brent crude oil prices touched its highest this year, supported by an unexpected drop in US crude oil stocks.

International Brent crude oil futures touched $67.80 per barrel and then settled at $67.75 per barrel, gaining 20 cents from its last close. The price level is highest since November 2018, reported Reuters.

The US West Texas Intermediate (WTI) crude futures were at $58.38 a barrel, up 12 cents from last session.

In its weekly report, the US Energy Information Administration (EIA) said that the commercial crude oil inventories dropped with increase in refinery output.

Crude inventories declined by 3.9 million barrels to 449.07 million barrels last week, against expectations of a 2.7 million barrel increase.

Additionally, the drop in US crude oil production by 100,000 barrels per day (bpd) also supported oil prices.

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By GlobalData
“Tighter global inventories from OPEC-led supply cuts and US sanctions on Venezuelan petroleum products have cemented support for oil prices.”

The global oil market has been gradually recovering following supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC) member countries.

Ongoing sanctions against major petroleum producers Venezuela and Iran also supported oil prices.

Besides the sanctions, oil supplies were severely disrupted in Venezuela due to massive electricity blackouts across the country.

Phillip Futures official Benjamin Lu told the news agency: “Tighter global inventories from OPEC-led supply cuts and [… ] US sanctions on Venezuelan petroleum products have cemented support for oil prices.”

The US is working to reduce Iran’s overall crude exports to below 1 million barrels per day (Mbpd) or by 20% compared to May 2018 levels. It is pressuring importing countries to curb purchases from Iran to avoid US sanctions.