An oil well is seen near Denver, Colorado. Picture: Reuters
An oil well is seen near Denver, Colorado. Picture: Reuters

Singapore — Oil prices held steady on Wednesday, supported by a report of rising US crude inventories as well as the introduction of sanctions against Iran.

Front-month US West Texas Intermediate (WTI) crude futures were at $69.28 a barrel at 4.08am GMT, up 11c from their last settlement.

Brent crude oil futures were at $74.61 a barrel, down 4c from their last close.

Both futures contracts have risen during the previous two sessions.

"Crude oil prices rose as the reality of US sanctions on Iran weighed on sentiment. News from key buyers suggests the market is already adjusting to the new regime," ANZ bank said in a note on Wednesday.

The US government introduced a raft of new sanctions against Iran on Tuesday, targeting Iran’s purchases of US dollars — in which oil is traded — metals trading, coal, industrial software and its auto sector.

From November, Washington will also target Iran’s petroleum sector.

Iran is the third-largest producer among the members of oil cartel Opec. It shipped out almost 3-million barrels a day of crude in September, equivalent to around 3% of global demand.

Beyond the sanctions, the oil market was focusing on the US market, where the American Petroleum Institute (API) said on Tuesday that crude inventories fell by 6-million barrels in the week to August 3 to 407.2-million.

Official US fuel storage data is due to be released later on Wednesday by the Energy Information Administration (EIA).

In terms of production, the EIA on Tuesday slightly cut its 2018 expectation for average 2018 US crude output to 10.69-million barrels a day, down from its previous estimate of 10.79-million barrels a day.

On the demand side, China’s July crude oil imports recovered slightly in July after falling for the previous two months, but were still among the lowest this year due to a drop-off in demand from the country’s smaller independent, or "teapot", refineries.

Shipments into the world’s biggest importer of crude came in at 36.02-million tons in July, or 8.48-million barrels a day, up from 8.18-million barrels a day a year ago, and just up on June’s 8.36-million barrels a day, data from the General Administration of Customs showed.

However, July imports were still the third-lowest so far in 2018.