LONDON - Oil prices fell on Tuesday on expectations of an increase in U.S. crude inventories, but reports of a fall in Iranian oil exports helped limit losses.
Brent crude was down 80 cents a barrel at $79.98 by 0825 GMT. U.S. light crude was 60 cents lower at $71.18.
U.S. crude stockpiles are expected to have risen last week for the fourth straight week, by about 1.1 million barrels, according to a Reuters poll ahead of reports from the American Petroleum Institute (API) and the U.S. Department of Energy's Energy Information Administration (EIA).
U.S. oil production has increased steadily over the last five years, reaching a record high of 11.2 million barrels per day in the week to Oct. 5, EIA data showed.
But infrastructure within the biggest U.S. shale producing area, the Permian basin, has not kept pace with rising output, filling domestic tanks.
"Once pipelines and oil terminals are built connecting the Permian to the U.S. Gulf Coast, then there will be big step up in U.S. crude oil exports," Harry Tchilinguirian, oil strategist at French bank BNP Paribas told Reuters Global Oil Forum.
The API figures are due at 4:30 p.m. EDT (2030 GMT) with the EIA report following at 10:30 a.m. EDT (1430 GMT) on Wednesday.
Balancing the U.S. data were reports that Iranian exports of crude oil are falling faster than expected ahead of new U.S. sanctions on Tehran from Nov. 4.
In the first two weeks of October, Iran exported 1.33 million barrels per day (bpd) of crude to countries including India, China and Turkey, according to Refinitiv Eikon data. That was down from 1.6 million bpd during the same period in September.
The October exports are a sharp drop from the 2.5 million bpd in April before U.S. President Donald Trump withdrew from a multilateral nuclear deal with Iran in May and ordered the re-imposition of economic sanctions on the country, the data showed.
The U.S. special envoy for Iran said on Monday the United States aims to cut Iran's oil sales to zero.
Meanwhile, OPEC Secretary General Mohammad Barkindo said on Tuesday that global spare oil capacity was shrinking, adding that producers and companies should increase their production capacities and invest more to meet current demand.
With the world's only sizable spare oil output capacity, Saudi Arabia is expected to export more to offset the loss of Iranian oil supply from the sanctions.
Geopolitical tensions caused by the disappearance of a Saudi Arabian journalist Jamal Khashoggi in Turkey also remain.
Saudi Arabia, the world's largest oil exporter, has denied it was responsible for the disappearance of Khashoggi.