Oil rose to its highest level in six weeks on Wednesday after a surprise drop in US stocks and continuing concerns about the possible disruption of Middle Eastern supplies. Brent crude futures rose by $1.04 or 2.2%, to trade at $68.89 a barrel. Brent has risen 11.5 percent since hitting a two-month low of $61.77 in early February. West Texas Intermediate crude futures grew by $1.89 or 1.9%, to $64.74 a barrel.
Crude oil imports fell by half a million barrels per day, with the refinery increasing more than expected, by 400,000 bpd this week, while exports rose slightly. Saudi Crown Prince Mohammed bin Salman’s arrival in Washington on Tuesday raised speculation that the United States could re-impose sanctions on Iran, especially after renewed criticism of the 2015 nuclear deal.
Some energy consultants have suggested that new US sanctions on Iran could lead to its exports reduced by anywhere between 250,000 and 500,000 barrels per day by the end of the year, compared to crude oil exports, which reached nearly 2.0 million to 2.2 million bpd since early 2016 when sanctions were lifted. They also pointed out that oil sanctions against Iran would have a greater impact in a market that lacked supply rather than oversupply.
Investors have been particularly wary of a sharp rise in US output, which has grown by more than 20 percent since mid-2016 to 10.38 million bpd. The United States is on track to become the world’s top oil producer this year.
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