“Supply concerns are top of mind after the US left the Iran nuclear deal,” said Norbert Ruecker, head of macro and commodity research at Julius Baer Group Ltd. in Zurich. “The geopolitical noise and escalation fears are here to stay.”
Brent for July settlement rose 66 cents to $79.94 a barrel on the London-based ICE Futures Europe exchange at 10:49 a.m. local time, after adding as much as 1.1 percent to $80.18 on Wednesday. The global benchmark crude traded at a $7.66 premium to WTI for July.
West Texas Intermediate crude for June delivery traded at $72.13 a barrel on the New York Mercantile Exchange, up 64 cents. The contract climbed 18 cents, or 0.3 percent, to $71.49 on Wednesday. Total volume traded was 33 percent above the 100-day average.
Futures for September delivery on the Shanghai International
Energy Exchange gained 1.9 percent to 481.9 yuan a barrel, rising for a third day.
U.S. crude inventories fell 1.4 million barrels last week, while domestic production rose to 10.7 million barrels a day, the Energy Information Administration said on Wednesday. The specter of surging American output, which has topped 10 million barrels a day every week since early February, continues to place a cap on prices and undermine OPEC’s output cuts. Gasoline stockpiles also shrank last week by 3.79 million barrels, the EIA reported.
Members of the Organization of Petroleum Exporting Countries, including Saudi Arabia, Kuwait and the United Arab Emirates, said they have enough capacity to fill in any supply gap if renewed sanctions curtail Iran’s exports. Still, Goldman Sachs
said the group won’t proactively replace the lost barrels, given its current narrative that the market isn’t fully re-balanced.