Oil Prices Soar as US Sanctions Fuel Rally

Oil prices extended their rally for a fifth consecutive day as markets reacted to tighter US sanctions on Iran. According to ING strategists Ewa Manthey and Warren Patterson, ICE Brent climbed above $92/bbl while NYMEX WTI traded above $86/bbl.

The surprise build in US commercial crude inventories to the highest level since May drove oil prices higher. The EIA's latest weekly inventory report showed a 4.4m barrel increase to 428.8m barrels, contrasting sharply with API's reported 328k barrel draw and market expectations for a 74k barrel decline.

The commercial stock build was driven by higher domestic supply despite strong export demand and lower imports. Crude exports rose by 1.01m b/d week-on-week to 4.07m b/d while imports fell by 746k b/d to 6.59m b/d.