
After plummeting more than 3 percent on Wednesday, oil prices steadied early on Thursday, but still traded close to their seven-week low as the U.S.
Brent crude futures fell $2.73 to $71.92 a barrel, a 3.7 percent loss, by 12:33 p.m. EDT (1633 GMT).
"The re-imposition of US sanctions on Iran remains the key (price) driver in the near-term".
Watch oil trade in real time here.
Iran's oil exports have now fallen for three successive months as the country braces itself for the re-imposition of sanctions by the US.
China is rather looking to compensate for the decline in demand that Iran sees in its oil as other nations might halt imports amid USA threats.
Dmitry Peskov, a spokesman for Russian President Vladimir Putin, said the U.S. decision was counter-productive given the show of friendship between Putin and U.S. President Donald Trump in Helsinki last month.
Oil has declined about 7 percent from the highs of June as trade tensions between the United States and China imperil economic growth and energy demand.
More news: Is Meghan Markle allowed to be a bridesmaid for Priyanka Chopra?Analysts expect Iranian exports to drop by anything between 500,000 and 1 million b/d after full USA sanctions are re-imposed on November 5.
Investor concern that the trade spat will limit energy demand growth overshadowed Energy Information Administration data released Wednesday that showed United States crude inventories fell the second time in three weeks.
While the demand outlook was getting gloomier, supplies are likely to tighten with the introduction of US sanctions against Iran, which from November will also include oil exports.
Saudi Oil Minster Khalid al-Falih said his government's policy is to meet market considerations first.
"The market is supported by concerns the sanctions on Iran are going to reduce Iranian supply", said Tony Nunan, oil risk manager at Mitsubishi in Tokyo.
But US bank JPMorgan said a warmer-than-usual fourth quarter could stem from a potential El Nino weather pattern that "can cause droughts, flooding and other natural disasters across the globe, including heatwaves in the US that affect commodities". Nationwide inventories in the U.S. probably fell 3 million barrels last week, according to a Bloomberg survey of analysts before government data due on Wednesday. Gasoline inventories added 2.9 million barrels last week, the EIA said, against expectations for a drop of 1.7 million barrels in a Reuters poll. Its previous estimate was at 10.79 million barrels per day.
Some sources have said with exports falling, Iran's domestic refinery runs have increased, with a pick-up in gasoline output observed at some of its refineries, and more barrels are expected to go onto floating storage.
Oil prices dipped on Wednesday after China reported relatively weak import data, although the market remained well supported by falling USA crude inventories and the introduction of sanctions against Iran.
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