OLD BRIDGE, N.J. (DTN) -- Oil futures nearest to delivery traded on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange extended a rally for a second day, as markets reacted to the start of U.S. economic sanctions on Iran, and on expectations that domestic crude oil and oil products will register declines on the week.
Tuesday's start of economic sanctions on Iran will cut its ability to transact in U.S. dollar denominations that should reduce its ability to transact business on the global market.
Recent data from the Organization of Petroleum exporting countries, of which Iran is the third largest oil producing member, estimate Iran's June oil output at 3.799 million bpd, off 2.1 million bbl or 0.31% from a 3.811 million bpd output level in 2017.
Analysts expect this afternoon's oil data from the American Petroleum Institute to show a better-than 3.0 million bbl domestic crude oil decline, that includes a 1.2 million bbl drawdown in stocks at Cushing.
A 3.0 million bbl gasoline decline is forecast for commercial gasoline reserves, and a fractional build in middle distillates.
At settlement, West Texas Intermediate settled 16 cents higher at $69.17 bbl, while Brent rose 90 cents to settle at $74.65 bbl. Both contracts tested daily highs though falling short of key resistance levels at $70 bbl for WTI and $75 bbl for Brent. September RBOB futures finished 3.89 cents higher at $2.1040 gallon, and frontline ULSD futures settled up 2.98 cents at $2.1691 gallon.
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