The West Texas Intermediate (WTI) for October delivery price increased by 2.02 US dollars, or 3.07 percent, to settle at 67.86 dollars a barrel on the New York Mercantile Exchange, while Brent crude for October delivery increased by 2.15 dollars, or 2.96 percent, to settle at 74.78 dollars a barrel on the London ICE Futures Exchange.
In spite of these bearish factors, analysts said prices were prevented from falling further because of USA sanctions against Iran, which target the financial sector from August and will include petroleum exports from November. The data is expected to show shrinking reserves of oil in the United States as the government continues to sell off crude oil.
It will be tough for India to import crude oil from other sources with high import costs in the presence of weak Indian rupee.
According to BNP Paribas' London head of commodity markets strategy, Harry Tchilinguirian, considering the amount of oil lost from Iranian exports, it would need increases in production from other suppliers like Saudi Arabia to stabilize the oil market.
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Signs of tighter supply countered concern about slowing oil demand stemming partly from the trade dispute between the United States and China, the world's two largest economies. At the beginning of August, oil prices started their longest weekly losing streak in three years.
West Texas Intermediate crude for October delivery traded at $67.80 a barrel on the New York Mercantile Exchange, down 3 cents, at 9:14 a.m.in Tokyo. The crude oil benchmark is now trading at $66.90 per barrel. The global benchmark crude traded at a $6.90 premium to WTI.
Signs of slowing USA crude output growth and a weaker US dollar also provided some support to oil prices, said Kim Kwang-rae, commodity analyst at Samsung Futures in Seoul. Workers at Total SA's North Sea oil and gas fields will go ahead with scheduled strikes after talks broke down.
Oil demand is closely linked to economic activity and the trade dispute has already led analysts to trim their forecasts for future energy consumption. It came second to the US port district of Chicago, at 19 percent.