Oil rises for fourth day, shrugs off inventory build

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Oil prices rose for the fourth day in a row on Wednesday, with Brent nearing a five-month high of $70 a barrel, driven by OPEC-led supply cuts and United States sanctions imposed on Iranian and Venezuelan exports.

Brent for June settlement rose 24 cents to $69.61 a barrel on the ICE Futures Europe exchange as of 1:17 p.m.in London, having earlier climbed to $69.96.

Data released by the Energy Information Administration this morning showed that crude inventory in the US rose 7.24 million barrels in the week ended March 29, against expectations of a drop of over 0.4 million barrels. Washington is mulling more penalties against the Islamic Republic, whose crude exports have dropped more than twofold due to existing measures, according to an official as quoted by Reuters.

Brent, the global benchmark, is up almost 30 percent this year, while WTI has gained almost 40 percent, with prices underpinned by tightening global supply and signs of demand picking up.

The Energy Information Administration (EIA) data due later today is expected to show the U.S. crude inventories dropped 100,000 barrels last week.

Supply from OPEC countries hit a four-year low in March, a Reuters survey found earlier this week.

Despite the large build in USA crude stocks, market participants said prices were positioned to move up on tightening global supply and signs of demand picking up.

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Brent futures eased 2 cents to $69.29 by 0100 GMT.

As the U.S.is pressuring countries to follow its lead on sanctions against Iran and Venezuela, low output from both countries are fueling the rise in oil prices.

"As long as we don't see a major build with the DoE crude oil inventories, we could see a clean move higher", Moya said.

OPEC, Russia and other non-members - an alliance known as OPEC+ - agreed in December to reduce supply by 1.2 million bpd from January 1.

Commerzbank said in a note that the EIA could further revise down US production, after the agency last put January output at 11.9 million bpd, down 100,000 bpd from the previous month.

USA commercial crude oil inventories jumped more than 7.2 million barrels in the week ended March 29, the Energy Information Administration reported Wednesday.

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