Crude oil prices rose sharply Wednesday, driven up by a decline in the U.S. oil supply, and the expected effects of a new wave of sanctions on Iran. Iran is an influential member of the Organization of the Petroleum Exporting Countries (OPEC) and one of the worlds largest oil producers.
Brent crude, a benchmark oil, crossed the $80 per barrel mark earlier Wednesday before coming to rest at $79.74 per barrel at the end of the day. This latest increase puts Brent’s price at the highest level it’s been since the end of May, according to Reuters.
In addition to the impending sanctions on Iran, the U.S. stock of “crude inventories” fell by a dramatic 5.3 million barrels in the last week. This decline is vastly more substantial than the 805,000 barrels predicted by the analysts from the U.S. Energy Information Administration.
“Today’s crude stock draw of 5.3 million barrels fell far short of the (American Petroleum Institute’s) decline but was significantly larger than the normal draw of around 1 million barrels for this particular week,” said Jim Ritterbusch, president of oil trading advisory firm Ritterbusch and Associates, according to Reuters.