Oil prices hiked for a fourth day in a row, in the Asian session on Wednesday, after industry statistics showed an unexpected drop in U.S. crude inventories and pressure building up from the disappearance of a prominent Saudi journalist fueled supply worries.

It seems to be case that such worries are fading away from the market as the US Saudi relationships seem to improve today.

Last night, according to the American Petroleum Institute very surprisingly the U.S. crude oil inventories declined by -2.13 million barrels over the last week.

This cause Oil prices to rally upon release.

It would be indicative that the pre-mentioned release had a reverse effect on oil prices in comparison to last week’s EIA weekly figure surplus of 5M barrels.

On other news, China’s crude oil imports increased significantly in September reaching their highest level since May.

According to various sources the Chinese may be looking to pile up their inventory ahead of winter or they could have reached a favorable deal.

Moreover, black gold imports in China, rose 6 percent accounting for the first nine months of the year compared to the same period in 2017.

As we are now passing the mid October period and market gets closer to the 4th of November, markets remain on the edge with curiosity on sky high levels as to how the Iranian sanction issue will be played out.

Through Reuters, it was confirmed that Persian Oil exports have dropped during the September.

More precisely, Iran pumped 3.45 million bpd in September, falling some 150,000 bpd from August.

On the other hand India very surprisingly, increased its oil imports from Iran during September, shipping in about 528,000 barrels per day bpd, adding approximately 1 percent more than the 523,000 bpd of August and roughly 27 percent more than a year earlier.

We say “very surprisingly” because India is considered among the biggest Oil importers and to still keep ties with Persia, indicates Iran is still in the picture providing oil to a huge part of the world.

Market participants will be interest to see if the US will proceed as expected sanctioning countries dealing with Iran, which creates also interest on how the market reacts, as we get closer to the 4th of November when sanctions against it will be applied.

On the OPEC front some concerns were displayed regarding excess supply in the Oil market.

This was on a long term note, regarding mostly 2019.

At the moment OPEC sees the oil market as well supplied and is cautious of creating a glut for next year, confirmed by the group’s secretary-general, indicating producers are not in a hurry to expand the June agreement and increase productivity.

Furthermore, OPEC’s report showed total production of the group rose by 132,000 barrels per day in September, the highest this year.

At the moment, Saudi Arabia, head producer of OPEC, is the only oil producer with significant spare capacity in hand to deal with any unexpected shortfalls or even natural disasters which the market is not considering at the moment.

SaudibEnergy Minister Khalid al-Falih said earlier this month, the kingdom will invest $20 billion in the next few years to sustain and probably increase its spare oil production capacity.

With this move the kingdom displays its influence in the Oil market and its concern for the Long-term business in the Oil world.

It also exemplifies its initiative to be a leader and make certain investment decisions to provide for the world.

As a conclusion, some other notable news from the US stated that Oil companies are having a hard time in producing a significant cash flow due to various reasons.

They are facing drilling constraints and pressure to hold down spending as well as rising costs, depressing regional oil prices and slowing the pace of production growth.

Most of the above could be deriving out of the U.S. tariffs on imported steel which is slowly showing some unexpected effects including the Oil market.

After rolling down from last week’s highs, just below the 74.90 (R3) resistance barrier, oil prices started stabilizing once again.

Oil prices, despite the whole commotion about the (possible) death of the missing Saudi journalist and implied Saudi threats of cutting oil production and despite the unexpected drawdown of the API weekly crude oil inventories, oil prices stubbornly remained range bound (between 72.50 USD – 70.50 USD), with a median slightly above our 71.40 (S1) support line.

We see the case for the Saudi-US tensions to slowly fade away, however the release of today’s EIA Crude oil inventories figure could play a key role in the current weeks’ direction for oil prices.

On the other hand, the looming US sanctions against Iran could also play a key role and should the US continue to add pressure to Iran, we could see oil prices starting to rise.

Should the bulls take over, we could see oil prices breaking the 72.50 (R1) resistance level aiming for the 73.65 (R2) resistance area, and should that area be breached, doors are opening wide, for the black gold to reach last weeks’ highs, of the 74.90 (R3) hurdle.

On the other hand, should the bears dictate the commodity’s direction, we could see it breaking the 71.40 (S1) support line aiming for the round number of 70 (S2) and should even that be broken, oil would be trading in one month record low prices, heading for the 68.90 (S3) support barrier.