Investing.com - WTI crude oil prices settled higher Tuesday on signs of tightening crude supplies after the U.S. said it would sell strategic oil reserves ahead of sanctions on Iran that are expected to pressure global stockpiles of crude.
On the New York Mercantile Exchange crude futures for October delivery rose 1.4% to settle at $67.35 a barrel, while on London's Intercontinental Exchange, Brent rose 0.72% to trade at $72.73 barrel.
The U.S. government on Monday offered to sell 11 million barrels of sour crude from US strategic oil reserves.
The move allows President Trump to show his domestic base that he is taking measures to curb energy price increases, RBC said. And would help the market revert focus toward fundamentals rather than "administration-induced headlines," the bank added.
"This means that the President can give off the impression of increased efforts to tackle high gasoline prices for his domestic base ahead of both US midterm elections and the ramp-up of Iranian sanctions come later this fall," RBC said.
Crude oil prices have gained in recent sessions on optimism for progress on China-U.S. trade talks, slated for Wednesday. Yet, reports that China is shifting their cargoes to vessels owned by National Iranian Tanker to continue buying Iranian crude despite the re-imposition of sanctions by the United States does little to get the talks off to a positive start.
President Donald Trump pulled the United States out of the Iran nuclear agreement in May, paving the way for sanctions against Iran to snap back into place. The first set of sanctions came into effect last month; the second wave of sanctions, aimed at curbing Iran's crude exports, will come into effect in November.
The fourth-straight session of gains for oil prices arrives ahead of weekly U.S. petroleum inventory data from the American Petroleum Institute, an industry group, which is due later in the session at 4:30 p.m., while official data from EIA is set to be released Wednesday at 10:30 a.m.