Crude oil prices rose on Wednesday as supply was disrupted in Canada, leading to a shortage of supply in the markets. Oil also caused US officials to inform importers of the need to stop buying Iranian oil from November. Market participants pointed out that the complex situation surrounding Libyan exports also supported crude oil prices.
Brent crude futures rose 61 cents, or 0.8 percent, to $76.92 a barrel. The West Texas Intermediate crude futures contract was priced at $70.88 a barrel, up 35 cents, or 0.5 percent.
A US State Department official declared on Tuesday that the United States had called on all countries to stop importing oil from Iran from November. However, the markets did not react strongly to Washington’s pressure against Iranian exports, as the move was expected.
During the sanctions round that ended in 2016, Washington granted several Asian countries an exemption from sanctions, allowing it to continue importing from Iran. This time, however, Washington already hinted at the announcement of the renewal of the sanctions in May that it did not wish to grant any exemptions.
Washington has urged its allies to halt imports of Iranian oil, which would curb global supplies. The market continued to climb in trading on the settlement after the US Petroleum Institute said crude oil inventories in the United States recorded a sudden drop of 9.2 million barrels, far exceeding expectations of a decline of 2.6 million barrels.
Tensions dominated oil markets on Tuesday, as prices rose with the Canadian output falling, and visibility on Libya’s crude exports worsened, as did the trade conflict between the United States and other major economies. Brent’s price action is driven by uncertainties surrounding Libya’s exports to the Organization of the Petroleum Exporting Countries.
Prices are rising in North America due to production problems at Canada’s largest oil sands facilities in Sincrode, Alberta.
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