Oil prices edge up over Iran sanctions scare

Oil prices rose on Wednesday, supported by a drop in UScrude inventories and a weaker dollar, along with concerns about a potential shortfall of Iranian oil from November due to USsanctions.

Brent crude oil futures were at $72.83 per barrel at 0234 GMT, up 20 cents, or 0.3 per cent, from their last close.

USWest Texas Intermediate (WTI) crude futures were up 28 cents, or 0.4 per cent, at $66.12 per barrel.

UScrude inventories fell by 5.2 million barrels in the week to Aug.17, to 405.6 million barrels, ahead of analysts' forecasts for a fall of 1.5 million barrels, according to data from industry group the American Petroleum Institute.

Official data from the USEnergy Information Administration (EIA) is due at 10:30 a.m. EDT (1430 GMT) on Wednesday.

"Investors are also confident that (official) inventories in the United States will decrease this week," ANZ Bank said in a note.

Signs of slowing UScrude output growth and a weaker USdollar also provided some support to oil prices, said Kim Kwang-rae, commodity analyst at Samsung Futures in Seoul.

The USdollar index against a basket of six major currencies eased on Wednesday to 95.211 after losing 0.7 per cent the previous day, weighed by USPresident Trump's comments on monetary policy.

A weaker USdollar makes oil, which is priced in dollars, less expensive to buyers in other currencies.

The USEnergy Information Administration last week cut its 2018 UScrude production growth to 10.68 million barrels per day (bpd), from 10.79 million bpd amid lower crude prices.

Concerns also remain over how much oil will be removed from global markets by renewed sanctions on Iran, despite worries that demand growth could weaken amid trade disputes between the United States and China, the world's two biggest economies.

"The Iran issue continues to occupy traders' minds," said Greg McKenna, chief market strategist at futures brokerage AxiTrader.

Iran, a member of the Organization of the Petroleum Exporting Countries (OPEC) and OPEC's third-largest oil producer, said earlier this week no other OPEC member should be allowed to take over its share of oil exports.

Meanwhile, a Chinese trade delegation is in Washington to discuss trade disputes with the USside. But signs of a thaw were unlikely as USPresident Donald Trump told Reuters in an interview on Monday that he did not expect much progress.