Investing.com – WTI crude oil prices settled higher Tuesday as expectations for reduced global supplies following U.S. sanctions on Iran offset concerns over rising U.S. crude output.
On the New York Mercantile Exchange crude futures for June delivery rose 35 cents to settle at $71.31 a barrel, while on London's Intercontinental Exchange, Brent rose 19 cents to trade at $78.42 a barrel.
In a monthly report released Monday, the Energy Information Administration said crude-oil production from seven major U.S. shale plays is expected to grow by 144,000 barrels a day in June to 7.178 million barrels a day.
That added to concerns raised by OPEC in its monthly report on Monday. The oil cartel estimated non-OPEC supply in 2018 to grow by 1.7 million barrels per day, with nearly 90% coming from the United States.
Yet, offsetting those concerns somewhat was ongoing investor expectations that U.S. sanctions on Iran – OPEC’s third largest producer – would keep a lid on global oil supplies.
The United States announced last week it would impose sanctions on Iran over its nuclear program.
U.S. sanctions against Iranian crude oil customers are expected to commence on Nov. 5. But some countries could be granted relief on sanctions should they make significant cuts to their imports of Iranian oil over the next six months, the Treasury Department said last week.
Crude oil prices which rose to fresh three-and-a-half year highs intraday were also supported by expectations for a second-straight draw in U.S. crude supplies.
The Energy Information Administration (EIA) on Wednesday is expected to report crude supplies fell by 0.763m barrels.
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