Crude oil prices rose to a 2-month high on Wednesday, as data from U.S. Energy Information Administration revealed a drop in domestic crude supplies for the week ended September 14.
Traders also weighed the prospects of supply shortage once U.S. sanctions on Iran come into force. Tensions between Russia, a major non-OPEC crude producer, and Israel also continued to support oil’s upmove.
Crude oil futures for October delivery ended up $1.27, or 1.8%, at $71.12 a barrel, the highest settlement since July 10.
On Tuesday, crude oil futures ended up $0.94, or 1.4%, at $69.85 a barrel.
According the weekly crude oil inventory report from the Energy Information Administration, domestic crude supplies fell for the fifth straight week, declining by 2.1 million barrels in the week ended September 14.
Supplies at Cushing, Oklahoma, decreased by 1.250 million barrels last week, the EIA report said.
The EIA report further showed that gasoline stockpiles were down by 1.7 million barrels for the week, while distillate stockpiles climbed by 800,000 barrels.
On Tuesday, the American Petroleum Institute’s report showed U.S. crude stocks to have increased by 1.2 million barrels to 397.1 million in the week to September 14.
Following Saudi Arabia’s comments on Tuesday that it was comfortable with Brent crude’s prices above $80, it appears that the Kingdom would not aggressively respond to the rise in prices with supply increases.
OPEC and other producers including Russia are scheduled to meet in Algeria on September 23, to discuss ways to offset the loss of Iranian output, post sanctions from November 4.