The oil prices is trading higher in today’s trading session, following on from yesterday’ solid gains after a fall in US crude oil inventories and the uncertainty on how the upcoming sanctions against Iran will affect global supply.

U.S. crude oil stocks dropped by 8.6 million barrels to 395.9 million last week according to the American Petroleum Institute which may be exacerbated in the coming months on the back of a tropical storm that has forced a warning for over a million people to flee their homes from Florida and is likely to interrupt gasoline supplies and cause further drawdowns of US oil.

“Oil prices jumped overnight as American Petroleum Institute inventory data showed a large drawdown in inventories,” said William O’Loughlin of Australia’s Rivkin Securities.

The upcoming oil sanctions against Iran have already began to affect the market with a number of countries already beginning to cut back on their supplies from Iran in order not to fall foul of the united states who promise to deal with any countries that don’t support the sanctions.

Some countries such as China and Russia have vowed to continue buying Iranian oil but many predict this will not be enough to offset the large group of other countries refusal to buy the oil

“The looming supply risks in the Middle East, particularly U.S. sanctions on Iran, should outweigh the concerns of oil demand growth slowdown from the emerging market crisis and China-U.S. trade tensions,” noted analysts ANZ bank said on Wednesday.

Gold may come to the rescue for investors again as a hedge against uncertainty as the oil sanctions on Iran get ready to take effect