Oil price leaps to $74 per barrel as U.S. inventory drops

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The worldwide benchmark for crude oil, Brent International's futures contract for October delivery was trading at $72.60 per barrel, which was an increase of $0.39 cents.

A key index of the dollar versus a basket of other currencies.DXY fell on Friday, boosting the price of oil and other dollar denominated commodities.

Crude oil prices were in rally mode before the start of US trading after signs of another drain on domestic oil and gasoline inventories.

Oil prices also drew support from the prospect of a drop in crude exports from Iran in response to new USA sanctions on the No. 3 producer in the Organization of the Petroleum Exporting Countries.

The shift shows how trade is being affected even before United States sanctions targeting Iran's crude exports snap back into effect in early November.

Of course, this assessment on Iran's crude oil exports for August could prove to be premature, as data is for the first half of this month only.

Iran is the third-biggest producer within the Organization of the Petroleum Exporting Countries (OPEC), exporting on average around 2.5 million barrels per day (bpd) of crude and condensate this year, equivalent to around 2.5 percent of global consumption.

"The OPEC Reference Basket of Crudes (ORB) is made up of Saharan Blend (Algeria), Girassol (Angola), Djeno (Congo), Oriente (Ecuador), Zafiro (Equatorial Guinea), Rabi Light (Gabon), Iran Heavy (Islamic Republic of Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Qatar Marine (Qatar), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela)". China will apply 25 per cent duties on American diesel, gasoline and other petroleum products, but United States crude is excluded from the latest list of sanctions.

The US/China trade tensions fuelled concerns that global economic growth could slow, weakening worldwide energy demand.

Both oil benchmarks saw low liquidity during early trading on Friday.

U.S. crude oil inventories decreased last week, the U.S. Energy Information Administration (EIA) said in a report on Wednesday. It came second to the USA port district of Chicago, at 19 percent.

Crude stocks at the Cushing, Oklahoma, delivery hub dropped by 808,000 barrels, the API said.