The barrel of West Texas Intermediate gained traction in the post-settlement trade after the weekly data released by the American Petroleum Institute revealed a surprise draw in crude oil inventories in the U.S. As of writing, the WTI was up 0.66% on the day at $72.15.
The curbs on Iran are having an effect on oil prices, with global benchmark Brent trading now trading near its highest level in four years. On Monday, officials in the government and oil companies said Indian firms like International Olympic Committee have optional volumes built in their annual crude oil purchase contracts with suppliers like Saudi Arabia and Iraq that will be more than enough to make up for any shortfall in supplies from sanction-hit Iran.
"Numbers from the American Petroleum Institute surprised the market yesterday, with US crude oil inventories declining by 2.13 million barrels over the last week, compared to expectations of a stock build", said ING commodities strategist Warren Patterson.
Saudi Arabia stands committed to meeting all of India's energy needs, especially in oil, its Energy Minister Khalid A. Al-Falih said on Monday.
Inventories rose sharply even as US crude production slipped 300,000 bpd to 10.9 million bpd last week, which analysts attributed to the effects of offshore facilities closing temporarily for Hurricane Michael.
US President Donald Trump gave Saudi Arabia the benefit of the doubt in the disappearance of journalist Jamal Khashoggi even as US lawmakers pointed the finger at the Saudi leadership and Western pressure mounted on Riyadh to provide answers.
In May, U.S. President Donald Trump pulled Washington out of the 2015 global deal on Tehran's nuclear program and vowed to restore sanctions on Iran's oil exports on November 4. With sanctions set to be applied on Iran, deliveries from them to India have been considerably higher through the first nine months of the year compared to the same period in 2017, as India has been a willing buyer, particularly earlier in the year, while other customers in countries such as South Korea and France have gradually dwindled away.
Saudi Arabia said in a statement on Sunday, that it plays a "vital role in the global economy".
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Pradhan said oil cartel OPEC has to ensure market stability that is beneficial to both consuming and producing countries.
The United States announced new sanctions after withdrawing from a nuclear deal with Iran in May.
Yet, after Brent Crude hit $86 a barrel earlier this month, market participants shifted their focus toward the demand side of the equation as various worldwide organizations warned that global economic growth may be cooling and oil demand growth may be hit by high oil prices.
However, it's always worth looking at what is happening in the real world of physical oil flows and pricing, as this can often tell a somewhat different narrative to what is driving the paper market.
US gasoline stockpiles fell by 2 million barrels last week, while distillate stockpiles declined by 800,000 barrels, according to the EIA.
Oil prices continued to fall yesterday after USA crude inventories rose more than expected.
India imported 5.67 MT oil from Iran during the quarter.