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Crude Oil Prices Settle Higher Despite Signs of Expanding U.S. Output

© Reuters. WTI crude prices rounded off the week with a win.© Reuters. WTI crude prices rounded off the week with a win. – WTI crude oil prices settled higher Friday, as signs of expanding U.S. output was offset by ongoing bets on steep losses of Iranian crude as U.S. sanctions loom.

On the New York Mercantile Exchange, for October delivery rose 0.58% to settle at $68.99 a barrel, while on London’s Intercontinental Exchange, fell 0.17% to trade at $78.05 a barrel.

Oilfield services firm Baker Hughes reported on Friday that the number of U.S. oil drilling rigs in operation fell by 7 to 867 this week.

The rise in rig counts, pointing to signs of expanding crude output, denting investor optimism for continued drop in production, which fell to 10.9 million barrels a day last week.

Oil prices also continued to enjoy a boost from expectations for tighter global supplies amid signs of falling demand for Iranian crude ahead of U.S. sanctions.

India, Iran’s second biggest oil customer, reportedly will cut its monthly loadings from Iran for September and October by nearly half from earlier this year.

President Donald Trump pulled the United States out of the Iran nuclear agreement in May, allowing sanctions against Iran to snap back into place. The first wave of sanctions went into effect last month and a second set of sanctions on Iran’s crude exports are slated for early November.

The weekly rise in oil prices was further supported by positive data showing crude stockpiles fell to a three-and-a-half year low, renewing investor bets on a global supply shortage, which would boost oil prices.

Inventories of U.S. crude fell by 5.296 million barrels for the week ended Sept. 7, beating expectations for of 1.300 million barrels, according to data from the Energy Information Administration (EIA).

The large draw in crude supplies comes as imports fell by about 0.443 million barrels per day (bpd), while exports declined by 0.320 million bpd, data from EIA showed.

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