London — Crude oil futures tracked upwards in the European morning session Wednesday following a stronger than expected draw in US crude stocks and with the market continuing to focus on the US sanctions against Iran coming back into force in November.
At 0920 GMT, ICE October Brent crude futures were up 69 cents from Wednesday's settle to $73.32/b, while the NYMEX October light sweet crude contract gained 55 cents to $66.39/b. The WTI contract rolled to October on Tuesday.
"The [American Petroleum Institute] inventory data published after close of trading [Tuesday] are lending buoyancy to prices this morning," analysts at Commerzbank said in a note Wednesday.
"Thus the official inventory data this afternoon [by the US Energy Information Administration] are also likely to show a more marked inventory reduction, which would see the zigzag course followed by US crude oil stocks during the summer months continue."
The API weekly data showed that US crude oil stocks drew by 5.2 million barrels, higher than expectations of 3.37 million barrels draw indicated by an S&P Global Platts poll of analysts Monday.
Meanwhile, the dip in global currencies including the Turkish Lira and Brazilian Real has weighed on the rally in oil markets due to the anticipation of a demand drop from the emerging markets.
"We should be more worried about the supply disruptions from Iran but the demand from emerging markets as longer term driver is having a bigger impact than the short term," Ole Hansen, head of commodity strategy at Saxo Bank, told S&P Global Platts Wednesday.
"The weakness in emerging markets is a worry as demand growth is driven by emerging markets and the potential impact on oil demand cannot be ignored."
