Oil dips on rising U.S. supply, but looming Iran sanctions prevent bigger fall

Oil prices dipped on Wednesday, pulled down by a reported rise in U.S. crude inventories, although falling exports from Iran ahead of U.S. sanctions prevented the market from sinking further, Reuters reports.

International Brent crude oil futures LCOc1 were at $75.90 per barrel at 0611 GMT, down 5 cents from their last close.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were down 4 cents at $68.49 a barrel.

In the United States, crude inventories rose slightly, by 38,000 barrels, to 405.7 million barrels in the week to Aug. 24, industry group the American Petroleum Institute said on Tuesday.

“The API reported surprisingly flat numbers to a market expecting a reasonable draw in crude and a build in products,” said Sukrit Vijayakar, Director of oil consultancy Trifecta.

Official U.S. fuel inventory and crude production data will be published on Wednesday by the Energy Information Administration (EIA).

Despite the rise in U.S. inventories, traders said crude prices have been relatively well supported by the prospect of U.S. sanctions against Iran, which will start to target its oil industry from November.

Bowing to pressure from Washington, many crude buyers have already reduced orders from OPEC’s third-biggest producer.

Although Tehran is offering steep discounts, Iran’s August crude oil and condensate loadings are estimated at 2.06 million barrels per day (bpd), versus a peak of 3.09 million bpd in April, trade flows data on Thomson Reuters Eikon showed.