Oil prices were broadly higher just before noon in London as traders braced for an oil stock drop of 2.5 million barrels. The U.S. Energy Information Administration (EIA) will release its official report for last week’s supplies later today. The report will also confirm whether U.S. production continues to remain near its highs of 10.9 million barrels per day. On Tuesday the American Petroleum Institute (API) reported a 9.2 million barrel reduction in U.S. crude inventories for last week.
Also on Tuesday, the U.S. State Department demanded that all countries cease importing oil from Iran as of November. As reported by Reuters, Iran reported on Wednesday that this request is logistically impossible in such a short time frame. A U.S. delegation is scheduled to visit the Middle East next week to confirm that Gulf oil producers will help cut Iran out of the oil market when the U.S. sanctions kick in on November 4th. OPEC has said that it will increase production when the sanctions go into effect.
U.S. WTI futures were trading up 58 cents per barrel to $71.11 per barrel as of 11:29 a.m. GMT on Wednesday. Brent crude futures were up 41 cents per barrel to $76.72 per barrel. Also pushing prices higher were continued disruptions in Canadian production due to an outage at the Syncrude plant which prevented the production of 350,000 barrels per day. The disruption is not expected to be resolved for another few weeks.
A power struggle in Libya also impacted oil prices as a clash between the Libyan government and rebel fighters has called into question which faction will oversee the country’s oil exports.