Image credit: A/S Global Risk Management

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Oil prices inch higher - expect a volatile day as U.S. central bank meeting minutes, oil inventory numbers are coming up.

Yesterday, oil closed the highest in more than 10 days. Last night, the American Petroleum Institute released the weekly oil inventory data which showed a draw of 5.2 mbbl crude oil. The last couple of weeks the U.S. refineries have been running at an increased pace, which is a probable explanation for the draw. The day ended with Brent oil price closing at $72.63. A draw on gasoline inventories of 0.93 mbbl and a build in distillates of 1.8 mbbl was as well reported by the API. Later today, the Energy Information Administration (EIA) will release the weekly oil inventory report - expectations are a draw of just above 1 mio. barrels. Last week saw a huge build of almost 7 mio. barrels.

Earlier this year, Iraq expressed a desire to increase crude production and exports as well. Since OPEC adopted a return to 100% compliance to the production cut agreement, Iraq proved the ability to increase exports. Allegedly, Iraqi exports will be between 3.6-3.7 mbpd in August compared to 3.54 mbpd in July. Also, it seems like Iraq has more export capacity from its northern regions.

A concern in the market is currently how many barrels of crude will go missing when the U.S. sanctions against Iran is in full effect in November, and a derived concern is thus how many of them OPEC is able to offset. Currently, market consensus is that the organisation's members will be able to at least offset some.

On the financial front, the U.S. existing home sales count will be released later today ahead of tonight's U.S. central bank meeting minutes, which could spur some volatility in the financial markets, potentially spilling over to the oil market.