Investing.com – Oil prices climbed on Monday morning as U.S. energy firms cut output from some rigs last week and the supply is expected to tighten as Washington’s sanctions against Iran take effect in November.
Crude Oil WTI Futures for October delivery rose 0.65% to $68.19 per barrel at 11:58PM ET (03:58 GMT), while Brent Oil Futures went up by 0.61% to $77.30.
U.S. energy companies cut out two rigs last week, bringing the total to 860, according to energy services company Baker Hughes. Reports showed that the rig count in the U.S. has stagnated since May.
U.S. sanctions against Iran, the world’s fifth largest oil exporter, will take effect in November. Energy consultancy FGE said various Iran customers including India, Japan and South Korea have been cutting back on Iran crude purchases.
“Governments can talk tough. They can say they are going to stand up to Trump and/push for waivers. But generally, the companies we speak to… say they won’t risk it. U.S. financial penalties and the loss of shipping insurance scares everyone,” said FGE.
U.S. Energy Secretary Rick Perry is set to meet with counterparts from oil exporters Saudi Arabia and Russia starting Monday.
The meetings follow Washington's efforts to encourage oil producers to keep their output up for two months before its renewed sanctions on Iran.
Saudi Arabia said last Wednesday that the country is seeking to keep oil prices between $70 to $80 for the time being.
OPEC and non-OPEC officials will meet later in September to discuss any increases in output, after the groups decided in June to boost output moderately.
Also supporting prices, China’s crude oil imports climbed 6.5% last month from July, reaching its highest since May, as demand from smaller and independent refiners picked up, according to data released on Saturday.
Crude arrivals in August accounted for 9.04 million barrels per day, up from 8 million bpd in the same month last year and 8.48 million bpd in July.