Oil rises as markets tighten ahead of Iran sanctions

[SINGAPORE] Oil prices rose on Monday as US markets tightened just weeks ahead of Washington's plan to impose new sanctions against Iran.

Brent crude futures were at US$79.74 per barrel at 0036 GMT, up by 94 cents, or 1.2 per cent.

US West Texas Intermediate (WTI) crude futures rose by 74 cents, or 1.1 per cent, to US$71.52 a barrel.

The market was "increasingly concerned about dwindling (US) inventories," ANZ bank said on Monday.

US commercial crude oil inventories are at their lowest level since early 2015. And while output remains around the record of 11 million barrels per day (bpd), recent subdued US drilling activity points towards a slowdown.

The tightening US market came ahead of sanctions that Washington plans to implement against Iran's petroleum exports from early November, which many analysts expect to result in a drop of more than 1 million bpd of crude exports.

The Middle East dominated Organization of the Petroleum Exporting Countries (Opec), of which Iran is a member, as well as top producer Russia are discussing raising output by 500,000 bpd to counter falling supply from Iran, although the discussions are not finalised.

REUTERS