Petroleum prices rallied towards its highest level this year on Wednesday, after a drop in U.S. crude inventories and as the prospect of the loss of Iranian supply added to concerns over the delicate balance between consumption and production.
Brent crude futures were last up 98 cents on the day at $80.06 U.S. a barrel, its highest level since May. U.S. crude futures rose $1.67, or 2.4%, to $70.94 U.S. a barrel.
Figures released by the Energy Information Administration (EIA) said Wednesday that U.S. crude oil inventories dropped by 5.3 million barrels last week.
Outside the United States, traders and political leaders alike have been focusing on the impact of U.S. sanctions against Iran that will target oil exports from November. For instance, Russian Energy Minister Alexander Novak on Wednesday warned of the impact of U.S. sanctions against Iran, adding global oil markets were "fragile" due to geopolitical risks and supply disruptions.
The Organization of the Petroleum Exporting Countries also announced it was cutting its forecast for oil demand growth in 2019 in its monthly report and said rising challenges in some emerging and developing countries could negatively impact global economic growth.
OPEC said it expected demand growth of 1.41 million bpd in 2019, a 20,000-bpd downgrade from its previous forecast.
Oil traders were also watching the progress of category 4 Hurricane Florence, which is expected to make landfall by Friday.
Crude output will not be affected by Florence, which officials have warned could be "historic" in its power and impact, but the evacuation of more than a million residents, as well as businesses, has prompted a near-term spike in fuel demand.
