After a sharp drop in US crude stockpiles, oil prices have stabilized. On Wednesday, the prices little changed after the news on inventories were announced. US crude inventories fell by nearly 5 million barrels and demand rose to a record high.
US crude stockpiles decreased by 4.8 million barrels last week, including a sharp drop in inventories at a key hub in Cushing, a major supplier of the product.
Government data showed on Wednesday that demand had reached a record 21.9 million barrels a day in the past four weeks.
High activity and an increase in refining volumes at US refineries suggest the market could also face supply constraints in the coming months.
The prospect of more supplies from Iran has exerted pressure on the market this week and crude prices declined by about 2% on Tuesday as Washington resumed indirect talks with Iran to reopen the nuclear deal.
The agreement could lift the US sanctions on Iranian oil and quickly increase supply in the market. However, a number of vital issues must be resolved.
According to senior market analyst Craig Erlam, if the talks between Iran and the US end positively, oil prices will come under some pressure. However, at the same time, a breakdown in negotiations could prove to be a catalyst for a huge increase in prices up to triple digits.
Analysts believe industry fears about global political risks eased slightly on Wednesday.
