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

Singapore/London — Oil prices steadied on Wednesday despite relatively weak Chinese import data as the market was still supported by falling US crude inventories and the introduction of sanctions against Iran.

Front-month Brent crude oil futures were at $74.85 a barrel at 9.51am GMT, up 20c, or 0.25%, from their last close. US West Texas Intermediate (WTI) crude futures were at $69.35 a barrel, up 18c.

China’s crude 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 tonnes last month, or 8.48-million barrels per day (bpd), rising from 8.18-million bpd a year earlier and just up on June’s 8.36-million bpd, customs data showed.

Singapore-based brokerage Phillip Futures said an escalating trade dispute between the US and China has "unnerved investors on the prospect of lowered global oil demand growth".

Markets remained supported by the introduction on Tuesday of new US sanctions against Iran, which initially target Iran’s purchases of dollars — in which oil is traded — as well as metals trading, coal, industrial software and its automotive sector. From November, Washington will also target Iran’s petroleum sector. Iran is the third-largest producer in oil cartel Opec.

"We view it as very unlikely that the US administration will be successful in reducing Iranian exports to zero," analysts at MUFG said in a note on Wednesday. They said Iranian exports were likely to drop by up to 1-million bpd by November, but even that could push Brent to $85 a barrel if oil markets were hit by other disruptions in producer countries such as Libya or Venezuela.

The market was also bolstered by a report on Tuesday from the American Petroleum Institute (API), which said crude inventories fell by 6-million barrels in the week to August 3 to 407.2-million. Official US fuel storage data is due later on Wednesday from the Energy Information Administration (EIA).