Investing.com – Crude oil prices settled higher Tuesday, as concerns about oversupply eased amid expectations U.S. oil stockpiles fell last week.
On the New York Mercantile Exchange crude futures for September delivery gained 63 cents to settle at $68.52 a barrel, while on London's Intercontinental Exchange, Brent climbed 0.33% to trade at $73.30 a barrel.
Oil prices clawed back losses from the previous day as data due Wednesday is expected to show U.S. crude supplies, already close to 3-year lows, fell by 2.3 million barrels.
The American Petroleum Institute, an industry group, releases its report at 4:30 p.m. ET, followed by the Energy Information Administration's report Wednesday at 10:30 a.m. ET.
Tight oil inventories both in the US and abroad have stoked investor expectations for a global supply shortage, as oil market participants continue to warn that even small disruption in output could result in "dangerous" oil price volatility.
Global spare oil output capacity is "very tight if not completely absent," Bob McNally, president of Rapidan Energy Group, told a US Senate panel Tuesday. This creates the potential for "dangerous" price volatility amid disruptions from Iran, Venezuela and Libya, he added.
The loss of Iranian crude to the market – amid U.S. sanctions on the Islamic Republic, which get underway in November – is seen by many as the biggest risk to global supplies. Analysts have estimated up to 1 million barrels a day of Iranian crude could be wiped of the market.
U.S. President Donald Trump in May said the United States would leave the 2015 Iran nuclear agreement, paving the way for sanctions to resume.