OPEC chief says Iran still 'very important' as US sanctions loom

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U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading over 1 percent higher early Tuesday in response to a warning about limited supply from the Organization of Petroleum Exporting Countries (OPEC).

Still, OPEC will face rising anger from Iran, one of the cartel's top producers.

However, the report also added that Barkindo did not specify how the market, which is already tight, could make up for the loss of supply from a key producer like Iran.

Prices pared gains in post-settlement trade after data from industry group the American Petroleum Institute showed USA crude inventories rose by 1.2 million barrels in the week to September 14 to 397.1 million, compared with analysts' expectations for a decrease of 2.7 million barrels.

OPEC ministers are also slated to meet this Sunday, but no decisions or adjustments are expected to be made while the OPEC group meets to discuss output policies and their compliance.

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.

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US sanctions affecting Iran's petroleum sector will come into force from November 4, though many buyers have already curbed their purchases, raising questions about how the market will make up the lost supply.

"It was a squarely bullish report", said John Kilduff, a partner at Again Capital Management in NY.

Oil prices were steady on Wednesday as concerns that producers will not be able to respond to a shortfall in supply once USA sanctions on Iran are enacted outweighed a gain in stockpiles in the United States, the world's biggest oil user.

Iranian oil exports have plunged about 35 percent since April, the month before Trump ripped up the diplomatic deal that President Barack Obama negotiated to curtail Tehran's nuclear program and announced new oil sanctions.

Russian Federation has told Israel it will take all necessary measures to protect its military personnel in Syria, the Foreign Ministry in Moscow said. Earlier this month, Saudi shipments into the US reached a four-week average of 1 million barrels a day for the first time since late 2017, according to government data.

Oil markets dropped on Tuesday as the latest escalation in the Sino-US trade war clouded the outlook for demand, although concerns over tightening supply offered prices some support. That follows an announcement from the U.S. that it will impose a 10 per cent tariff on about $200 billion in Chinese goods next week.

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