The likelihood of a return of Iran’s supply dwindled after the US secretary of state said that lifting sanctions on Tehran was not possible. Oil prices rose in the second session on Wednesday, with signs of strong fuel demand in western economies.
Price increases have been capped in recent weeks as oil supplies are assumed to increase this year as Iran progresses in nuclear deal negotiations with western powers and the possibility of lifting sanctions on Iran’s exports.
But US Secretary of State Antony Blinken said on Tuesday that hundreds of US sanctions against Tehran will remain in effect even if Iran and the US return to abide by the nuclear deal.
Brent crude futures, which had previously hit $72.83, the highest since May 20, 2019, were up 32 cents, or 0.4%, at $72.54 a barrel at 0640 GMT.
West Texas Intermediate (WTI) crude futures rose 31 cents, or 0.4%, to $70.36 after hitting $70.62, the highest level since October 17, 2018.
On Tuesday, Brent rose 1% and WTI rose 1.2%.
Successful vaccinations and the summer driving season in the United States and Europe continue to support fuel demand, while the rising demand outlook supports crude oil prices.
Recent traffic data shows travelers taking to the streets as restrictions ease, and congestion in 15 European cities has reached its highest level since the start of the coronavirus pandemic.
On Tuesday, the U.S. Energy Information Administration estimated that the increase in fuel consumption in the United States, the world’s largest user of oil, will be 1.49 million barrels per day, more than its previous estimate of 1.39 million barrels per day this year.
Industry data showed US crude inventories fell in line with analysts’ expectations last week.
The American Petroleum Institute reported that in the week of June 4, crude oil inventories fell by 2.1 million barrels.
Official stock data from the US Energy Information Administration will be released on Wednesday at 1430 GMT.
