Oil prices rose for a fourth day on Wednesday after industry data showed a surprise decline in USA crude inventories and tension over the disappearance of a prominent Saudi journalist stoked supply worries.
US West Texas Intermediate crude was up 35 cents, or 0.5 percent, at $72.27 a barrel by 0007 GMT on Wednesday, having settled up 14 cents. The global benchmark, which hit a more than two-week low late last week as equity markets dropped, is trading around $5 below a four-year high of $86.74 marked on October 3. On Monday, officials in the government and oil companies said Indian firms like International Olympic Committee have optional volumes built in their annual crude oil purchase contracts with suppliers like Saudi Arabia and Iraq that will be more than enough to make up for any shortfall in supplies from sanction-hit Iran.
Overall, analysts forecast that US crude stockpiles rose last week for the fourth straight week, by about 2.2 million barrels, according to a Reuters poll ahead of weekly inventory reports.
Iran became India's second biggest oil supplier during the first quarter (April-June) of the current fiscal, with OMCs opting for the heftier discounts offered by the Iranians, who thus replaced Saudi Arabia in this position, according to official data.
In WTI, wagers on falling prices have increased as US inventories piled up, and concerns about constrained Permian takeaway capacity and the build-up of stocks have prevailed over the past few weeks.
US President Donald Trump said on Monday that he will send Secretary of State Mike Pompeo to Saudi Arabia over the disappearance of the journalist, Xinhua reported. The new round of USA sanctions against Tehran are set to start in November 4. He also assured of increased oil production in a month.
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"My frequent visits to India are indicative of the importance Saudi Arabia attaches to this great nation as a critical energy and a strategic global player", he said calling the county an "emerging superpower".
Last week, oil prices slumped as global stock markets fell, but a recovery in financial markets, boosted by earnings growth helped provide support to oil prices on Tuesday, traders said. They also expect to see declines in stockpiles of gasoline by 1.52 million barrels and distillates by 1.5 million barrels.
"What you can say beyond doubt is that it's creating lots of exotic trade flows that hadn't been in the market before", he said.
Still, reports that Iranian exports of crude oil may be falling faster than expected ahead of new US sanctions on Tehran from November 4 lent support.