Oil prices rise for third day as US data shows strong demand
On the supply side, an Opec source says there are no immediate plans to increase output to make up for falling supplies from Iran
Tokyo — Oil rose for a third day on Thursday amid another drawdown in US inventories and strong US demand for petrol.
Prices drew further support from signs that the Opec cartel might not raise output to address shrinking supplies from Iran.
Global benchmark Brent crude was up 20c or 0.3% at $79.60 by 2.14am GMT, after gaining 0.5% on Wednesday.
US West Texas Intermediate crude was up 55c or 0.8% at $71.67 a barrel, after rising nearly 2% the previous session.
US crude oil stockpiles fell for a fifth straight week to three-and-a-half-year lows in the week to September 14, while petrol inventories also showed a larger-than-expected draw on unseasonably strong demand, the Energy Information Administration said on Wednesday.
Crude inventories declined by 2.1-million barrels, the EIA data showed, compared with expectations for a decrease of 2.7-million barrels.
"The bulls are back in charge, even more so after traders were conveying a high degree of resistance to the unexpected build on the API survey," said Stephen Innes, head of trading for Asia-Pacific at Oanda in Singapore.
He was referring to the weekly survey from the oil industry group the American Petroleum Institute (API) on Tuesday that indicated US stocks had risen by 1.2-million barrels last week.
US sanctions affecting Iran’s oil exports come into force on November 4 and many buyers have already scaled back Iranian purchases. But it is unclear how easily other producers can compensate for any lost supply.
The Organisation of the Petroleum Exporting Countries and other producers including Russia meet in Algeria on Sunday to discuss how to allocate supply increases within their quota framework to offset the loss of Iranian supply.
Opec sources have told Reuters no immediate action is planned and producers will discuss how to share a previously agreed output increase.