Oil prices have increased after the US crude inventories fell, in part due to a Canadian production outage, as well as impending US sanctions against Iran, which is a member of the Organization of the Petroleum Exporting Countries (OPEC).
US West Texas Intermediate (WTI) crude futures climbed up 37 cents, or 0.4%, to reach $74.51 a barrel after hitting its highest level since November 2014 at $75.27 on 03 July, Reuters reported.
Go deeper with GlobalData
Brent crude futures witnessed a hike of 28 cents, or 0.4%, to stand at $78.04 per barrel.
The tightness in the US crude stockpiles comes amid an outage at Suncor Energy’s 360,000 barrels per day (bpd) Syncrude Canada oil sands facility near Fort McMurray in Alberta, which usually supplies the US.
In the face of the looming US sanctions, Iran is threatening to cut supplies, triggering fears of increased tightness.
However, OPEC members recently agreed to raise production to address supply concerns.
According to industry body the American Petroleum Institute (API), the US crude inventories declined by 4.5 million barrels to 416.9 million barrels in the week ending 29 June.
Energy consultancy Trifecta managing director Sukrit Vijayakar was quoted by the news agency as saying: “The draw in distillates was against expectations.”
The decline in fuel inventories was largely attributed to the outage at the Syncrude facility, which will continue through this month.
However, brokerage Phillip Futures said that the lower stocks are a result of gasoline demand fuelled by a peak driving season in the northern hemisphere.
