Oil prices headed higher on Wednesday, boosted by data out from the American Petroleum Institute which confirmed that U.S. crude inventories dropped by 4.5 million barrels last week. Also raising prices was a production problem in Canada’s Syncrude facility which is not expected to be resolved for at least another week or two, if not through the end of July. The plant is located in Alberta, Canada. To compensate for the current supply slowdown in Canada and other struggling countries such as Venezuela and Libya, OPEC and its non-member allies have agreed to raise production in the coming months, lightening the production cuts that have been in effect since early 2017.
U.S. WTI futures were up 0.69 percent early Wednesday morning in Asia, trading at $74.65 per barrel as of 10:12 a.m. HK/SIN. The liquid commodity had hit over $75 per barrel briefly on Tuesday for the first time since late 2014. Brent crude futures were up 0.44 percent to trade at $78.10 per barrel. Trade volumes are expected to be lower on Wednesday due to the Independence Day holiday in the United States.
Traders are eager to hear more about the U.S. government’s plans to bar Iranian oil exports from the market and to see how this possibility will move prices. Iran has said that if sanctions are implemented it will not tolerate other countries benefiting by their loss. Saudi Arabia has offered to increase production to cover Iran’s potential deficit in the global marketplace. As reported by Reuters, Iranian President Hassan Rouhani said on Tuesday that it was “unwise to imagine that some day all producer countries will be able to export their surplus oil and Iran will not be able to export its oil.”