US oil futures surged almost 2 percent on Wednesday as they were bolstered by a fifth weekly crude inventory drawdown and strong domestic gasoline demand amid ongoing global supply concerns over USA sanctions on Iran that come into force in November.
Novak also remarked that OPEC+ would discuss supply and demand forecasts for the fourth quarter and that Russian Federation was ready to discuss cooperation with the U.S.to balance the oil market; he did not elaborate on the latter point other than to say such discussions were not now being held.
OPEC and non-OPEC compliance with the Vienna Agreement production ceiling slipped to 97 percent in July as large producers relaxed output constraints amid falling production in crisis-hit Venezuela and expectations that Iran may be prevented from exporting oil to large parts of the globe.
A group of oil-market analysts predicted in April that sanctions wouldn't cut exports by more than 800,000 barrels a day.
The Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers, including the world's biggest producer Russian Federation, are meeting on September 23 in Algiers, Algeria, to discuss how they can allocate supply increases within their quota framework to offset the loss of Iranian oil supply.
An adviser to Iran's oil minister said on Tuesday that expected USA sanctions on Iran's energy sector could not reduce the country's oil sale to zero because of high demand levels in the market, state TV reported.
U.S. West Texas Intermediate crude was up 94 cents, or 1.4%, at $69.85/Bbl, off a session high of $70.42/Bbl.
However, the OPEC still doesn't have any idea on how it would protect Iran while comforting it at the same time.
Crude inventories fell 2.1 million barrels last week to 394.1 million barrels, the lowest level since February 2015, EIA data showed.
Official inventory data from the U.S. Energy Information Administration will be released later on Wednesday.
Bloomberg reported on Tuesday, citing unnamed Saudi sources, that the kingdom was now comfortable with prices above $80 per barrel, at least for the short term.
U.S. Energy Secretary Rick Perry said last week in Moscow that he did not foresee any price spikes once sanctions came into effect, and was positive about Saudi output.
Russian Federation has told Israel it will take all necessary measures to protect its military personnel in Syria, the Foreign Ministry in Moscow said.
China, one of the world's largest oil consumers, on Tuesday added $60 billion of USA products to its import tariff list.
Intensifying trade tensions between the US and China could hit economic growth and reduce crude oil demand next year, while supply disruption risks could push prices further upward, according to the International Energy Agency (IEA). That follows an announcement from the United States that it will impose a 10 per cent tariff on about $200 billion in Chinese goods next week.