Brent oil has backed off from one-week highs

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Oil prices eased on Wednesday, having neared its highest level this year after a drop in US crude inventories and the prospect of the loss of Iranian supply added to concerns over the delicate balance between consumption and production.

U.S. West Texas Intermediate (WTI) crude CLc1 futures rose $1.12 to settle at $70.37 a barrel, a one-week high.

Futures in NY dropped as much as 1.8 percent after closing at the highest in nearly two months.

Brent for November settlement advanced $1.69 to settle at $79.06 on the ICE Futures Europe exchange.

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Oil prices fell more than 2 percent on Thursday, with Brent slipping back from four-month highs as investors focused on the risk that emerging market crises and trade disputes could dent demand even as supply tightens.

Russia, the United States and Saudi Arabia are the world's three biggest oil producers by far, meeting around a third of the world's nearly 100 million barrels per day of daily crude consumption.

While Iran's liquefied petroleum gas (LPG) exports in August jumped to the highest in almost two years, mostly thanks to China which imposed tariffs on U.S. LPG, Tehran lost customers in East Africa-Kenya and Tanzania have stopped importing LPG from Iran due to the sanctions, according to Platts tracking data and sources.

U.S. crude inventories USOILC=ECI fell by 5.3 million barrels in the last week, the U.S. Energy Information Administration said on Wednesday. "The situation should be closely watched, the right decisions should be taken".

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"What you're seeing is a tightening inventory picture from the Iranian sanctions globally", said Nick Holmes, an analyst at Tortoise in Leawood, Kansas, which manages $16 billion in energy-related assets. This means there will be less strain on other producers in making up for supply losses from Venezuela and Iran as renewed US sanctions kick in. Industry data showed USA inventories slid 8.64 million barrels last week. But Iran has reported stable and unchanged production figures for the last three months of 3.8 Mmbpd.

According to S&P Global Platts Analytics, oil markets are looking tight in the fourth quarter, with political risk to crude supply remaining high due to concerns over Venezuelan production declines and the potential for disruption in Iraq and Libya.

"World demand will average 98.82 million bpd in 2018, a demand growth of 1.62 million bpd", said S&P.

Crude prices were also pushed up by Hurricane Florence offshore the United States amid surging demand for gasoline and diesel.

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The storm is expected to make landfall on the U.S. East Coast on Friday.

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