Oil prices in Asia slipped slightly on Wednesday but stayed near a one-month peak, buoyed by new U.S. sanctions on a network of shipping firms and vessels as traders awaited this weekend’s OPEC+ meeting.
Brent crude fell by 16 cents, or 0.2%, to $68.98 a barrel, while U.S. West Texas Intermediate (WTI) dipped 13 cents, or 0.2%, to $65.46 a barrel.
Prices had closed more than 1% higher in the previous session after Washington announced sanctions on a shipping network run by a businessman with Iraqi and Kuwaiti citizenship, accused of smuggling Iranian oil under the guise of Iraqi barrels.
The new sanctions continue to support prices by signaling the potential for tighter supply, said Priyanka Sachdeva, senior analyst at Phillip Nova. She added, “Structural volatility remains, as sanctions on Iran and wider geopolitical tensions add a risk premium that keeps prices near recent highs.”
The market is also waiting for the outcome of the September 7 meeting of eight OPEC members and their allies. Analysts believe the group is unlikely to adjust production levels for now.
Emral Jamil, senior analyst at LSEG, noted, “Geopolitical risks continue to influence oil-price trends. The market is watching the upcoming OPEC meeting and remains on alert for any increases that could lead to a supply surplus.”
Expectations of lower U.S. inventories also lent support. A preliminary Reuters poll showed U.S. crude stocks likely fell last week, along with distillate and gasoline inventories. Three surveyed analysts estimated crude inventories dropped by an average of about 3.4 million barrels in the week ended 29 August.
However, weak economic data limited gains: U.S. manufacturing activity contracted for a sixth consecutive month, and tariffs imposed by President Donald Trump continued to weigh on business confidence and economic activity, clouding the outlook for oil demand.
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