Oil rises above $74 on report of USA inventory drop, Iran sanctions

China Shipowners Shunning Iranian Oil as U.S. Sanctions Near

Oil Prices Gain on Falling U.S. Inventories

The price of WTI and Organisation of Petroleum Exporting Countries, OPEC, basket of 15 crudes stood at $67.22 and $70.27 per barrel respectively.

Signs of slowing United States crude output growth and a weaker U.S. dollar also provided some support to oil prices, said Kim Kwang-rae, commodity analyst at Samsung Futures in Seoul.

Giovanni Staunovo, a commodity analyst and chief investment officer at Swiss bank UBS, said in response to questions emailed from UPI that API is the main driver behind the rally this morning, though official data from the U.S. Energy Information Administration could make or break the rally. USA light crude CLc1 was 3 cents lower at $67.83 a barrel.

Petroleum prices rose to session highs on Wednesday after government data in the US showed a larger-than-anticipated drop in crude inventories as imports stateside fell and refineries continued to run near full capacity.

Concerns that an escalating trade war between China and the US could slow economic growth and weigh on crude purchases eased slightly after sources told Reuters that China's Unipec will resume purchases of USA crude oil in October, after a two-month halt due to the fight.

The price for Brent crude oil, the global benchmark for the price of oil, was up 1.89 percent as of 9:18 a.m. EDT to $74 per barrel.

US crude rose more than 4 percent on the week, after seven consecutive declines, and Brent rose 5.3 percent after three weeks of falling prices.

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Iran is the third-biggest producer within the Organization of the Petroleum Exporting Countries (Opec) and the nation exports around 2 million barrels per day of crude, equivalent to around 2 per cent of global consumption.

"Investors remain cautious as Wednesday's surprise gain in US stockpiles remained fresh in their minds", the bank said on Friday.

On the supply side, USA crude oil production C-OUT-T-EIA rose back to 11 million barrels per day, the EIA report said. "The fundamental picture is tighter than it was a year ago".

Futures in NY were little changed after capping a five-day run of gains yesterday.

The shift shows how trade is being affected even before USA sanctions targeting Iran's crude exports snap back into effect in early November.

A weekly report on USA drilling activity is due to be published later on Friday by energy services firm Baker Hughes.

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