Some analysts said that global crude supply losses could range from 600,000 to 1.5 million barrels per day due to the re-imposition of USA sanctions on Iran.
Further out, Weekly Distillate Stocks rose by 1.230 mbpd and Gasoline inventories unexpectedly increased by 2.900 mbpd. It shipped out nearly 3 million barrels per day of crude in September, equivalent to about 3% of global demand.
Crude oil prices extended gains Tuesday as the Trump administration's sanctions against Tehran kicked in, setting the stage for a drop-off in production from the world's fifth-largest producer. A second round is scheduled to begin in November. China companies too are interested to continue trading in Iranian oil and natural gas. Russian Federation will continue to invest in oil and gas projects in Iran despite threats from the US. "If worst comes to worst and 1.5-2 million bpd of Iranian disappears from the market. calculations will go out of the window and oil bears will have to brace themselves for a very rough ride", PVM Oil Associates analyst Tamas Varga told Reuters. Benchmark U.S. crude oil lost 2 cents to $66.92 a barrel in electronic trading on the New York Mercantile Exchange. WTI settled at $69.17 on Tuesday and opened at $69.11 Wednesday morning.
Shipments into the world's biggest importer of crude came in at 36.02-million tonnes last month, or 8.48-million barrels per day (bpd), rising from 8.18-million bpd a year earlier and just up on June's 8.36-million bpd, customs data showed.
Indian Oil Corp, the country's top refiner, will buy 6 million barrels of United States crude oil for November to January delivery through a mini-term tender, its head of finance said on Wednesday. The agency expects crude production to average 11.7 million bpd in 2019, compared with 11.8 million bpd previously. Exports of refined products rose by 174,000 barrels a day last week to 5.2 million.
US gasoline futures fell 3.8 percent to $2.025 per gallon.
"Anyone doing business with Iran will NOT be doing business with the United States", he added. WTI Midland and WTI Cushing usually trade close to par, but there were several times over the past two years the spread has blown out, sometimes to up to 20 dollars a barrel.
The sudden popularity of the December contract versus November or October may have its roots in the traditional preference for Chinese commodity speculators to trade futures on a quarterly basis rather than monthly, according to Xue.
The VanEck Vectors Oil Services ETF (NYSEAMERICAN: OIH) traded down about 0.3%, at $25.64 in a 52-week range of $21.70 to $29.87.