This afternoon the price of Brent was $78.07.
The upturn in oil prices come as the United States' sanctions squeezed Iranian crude exports and after the USA crude oil production in 2019 was forecast to grow at a slower rate than previously expected, prompting supply concerns.
Major Japanese refiners were said last week to have officially notified Iran that they would halt all imports of Iranian oil for October while they wait for the Japan-U.S. talks on Iranian oil imports to make a permanent decision on how to proceed in November.
"Oil cut earlier losses and rose towards its highest level this year on Wednesday, after a drop in US crude inventories and as the prospect of the loss of Iranian supply added to concerns over the delicate balance between consumption and production".
"According to Bloomberg, in case the Iran sanctions come into place, oil price could go up to $150 a barrel", reported ET.
China has said that it would not stop buying Iranian oil, but Beijing is also said to have agreed not to increase its oil purchases from Iran.
Traders said this pulled wide open the discount of U.S. WTI crude versus Brent to around $10 per barrel, the biggest since June.
In its monthly report, OPEC said world oil demand next year would rise by 1.41 million barrels per day (bpd), 20,000 bpd less than last month and the second consecutive reduction in the forecast. Oil production has been hit by attacks on oil facilities and blockades, though previous year it partially recovered to around one million barrels per day.
U.S. crude stocks fell by 8.6 million barrels in the week to September 7 to 395.9 million, the American Petroleum Institute (API) said on Tuesday, while the U.S. Energy Information Administration (EIA) cut its forecast for U.S. crude output growth in 2019.
The Organization of the Petroleum Exporting Countries (OPEC) on Wednesday reduced its forecast for 2019 global oil demand growth, pointing to economic risks.
Although the shipment hiatus is unlikely to signal that China has been purposefully scaling back purchases to comply with USA pressure to have Iranian oil sales at zero, it could mean that Chinese refiners were looking for better terms for Iranian oil purchases, according to Bloomberg.
But it said rising demand could also be checked. The IEA said crude output fell in August by 150,000 bpd from July to a 25-month low of 3.63 million bpd, while exports fell by 280,000 bpd to 1.9 million bpd, from a peak of around 2.5 million bpd in May.
U.S. light crude pushed over $70 due to falling United States crude inventories and production levels.