Brent rose above $80 per barrel on Wednesday for the first time since May, spurred by expectations that US sanctions against Iran's oil exports, which will start in November, will tighten global markets.
The price of West Texas Intermediate, the US benchmark, was up 1.20 percent to $70.45 per barrel early Wednesday afternoon.
Brent crude futures were last down 23 cents on the day at $78.83 a barrel by 3pm, having touched a session peak of $79.66, the highest since late May, when the price broke above $80. Brent has climbed for four straight sessions, gaining 2.2 percent the previous day.
The latest forecast by IEA is that production by non-OPEC members will grow by over 2 million barrels daily during 2018 and by 1.8 million bpd during 2019, due to the non-stop growth in record output by the U.S.
The American Petroleum Institute is scheduled to release its weekly count of stockpiles later Tuesday, followed by the USA government's tally on Wednesday.
In May, US President Donald Trump pulled the US out of the 2015 nuclear deal with Iran and said other countries must stop buying oil from Tehran or face American sanctions.More news: Apple iPhone XR colors, ranked
The double whammy of a significant fall in Iranian crude exports owing to the USA strictures and a drastic dip in output in Venezuela due to its economic crisis is leaving worldwide crude prices on a high. As Florence moves closer to the southeastern coast of the USA, the storm appears likely to strengthen, forecasters said.
Bassam Fattouh and Andreas Economou at the Oxford Institute for Energy Studies wrote in a presentation in early September that they expect a total loss of 900,000 bpd of Iranian oil on the market.
"It is related to the fact that not all the countries have managed to restore their market and production", he said, referring to outages and falling production in Mexico and Venezuela. While Saudi Arabia has already stated it would increase output, Russian Federation is unlikely to comply, given its relationship with Iran and Washington's threat to impose new sanctions on Moscow. "Russia has the potential to raise production by 300,000 barrels (per day) mid-term, in addition to the level of October 2016", he said.
The storm could also affect the Colonial Pipeline, which transports oil through North and SC with the latter said to be in the direct path of the storm's eye.
Meanwhile, Hurricane Florence is set to park above the Carolinas coastline, threatening fuel markets along the US East Coast.
Refinery utilization rates rose by 1 percentage points.