Oil pushes past $80 as Iran fears mount

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Crude oil futures were stable to higher during mid-morning trade in Asia Wednesday after the American Petroleum Institute reported a larger-than-expected draw in United States crude inventories and geopolitical tensions remained in focus ahead of the re-imposition of USA sanctions on Iran.

Further dashing US hopes of crushing Iranian oil exports have been recent announcements from Iran's top two customers, China and India, that they would continue to import Iranian crude despite the looming threat of USA sanctions.

The increases extended a more than 2 percent climb in both crude benchmarks the previous session.

The price of West Texas Intermediate, the US benchmark, was up 1.20 percent to $70.45 per barrel early Wednesday afternoon. Brent crude, the global benchmark, fell $1.56, or 2%, to $78.18 a barrel to end a four-session winning streak.

"Oil prices jumped overnight as American Petroleum Institute inventory data showed a large drawdown in inventories", said William O'Loughlin of Australia's Rivkin Securities.

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"What you're seeing is a tightening inventory picture from the Iranian sanctions globally", said Nick Holmes, an analyst at Tortoise in Leawood, Kansas, which manages $16 billion in energy-related assets. In August, rising output in Libya, Iraq, Nigeria and Saudi Arabia offset declines in Iran, which is about to face new US sanctions that are already hurting Iranian exports, and in Venezuela.

India imported less Nigerian crude oil last month on the back of outages in a couple of major streams such as Bonny Light and Forcados.

GLOBAL oil output hit a record of 100 million barrels per day in August, but the market may tighten and prices rise as exports from Iran and Venezuela decline, the International Energy Agency said today.

As Florence moves closer to the southeastern coast of the U.S., the storm appears likely to strengthen, forecasters said.

Russian Energy Minister Alexander Novak on Wednesday warned of the impact of the USA sanctions against Iran.

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Each of those countries usually imports between 500 to 700,000 barrels of Iranian oil per month, a number which may be reduced even though they aren't expected to completely cut ties with Iran. "Russia has the potential to raise production by 300,000 barrels (per day) mid-term, in addition to the level of October 2016", he said.

That month Russian Federation produced 11.247 million barrels per day, a post-Soviet Union record high.

The storm is expected to make landfall on the U.S. East Coast on Friday.

Distillate stockpiles, which include diesel and heating oil, rose by 6.2 million barrels, versus expectations for a 1.4 million-barrel increase, the EIA data showed.

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