Oil prices rose on Monday amid speculation of increased fuel demand in U.S., and on concerns over supply outlook due to imminent sanctions on Iran.
According to reports, the federal regulators' draft proposal to rollback U.S. automobile efficiency requirements contends that their preferred plan would reduce "societal costs" by roughly half a trillion dollars through 2029, while increasing U.S. fuel consumption by 500,000 barrels per day.
The regulators have proposed a dramatic overhaul of tough efficiency rules set during the Obama administration - freezing mileage targets from 2020 through 2026 instead of raising them each year, according to Bloomberg.
Crude oil futures for September delivery ended up $1.44 or 2.1%, at $70.13 a barrel on the New York Mercantile Exchange.
Meanwhile, Brent oil futures for October were up $0.69 or 0.91% at $75.45 a barrel.
Natural gas futures for September were up $0.015 or 0.54%, at $2.797 per million btu.
Concerns about supply disruptions in Saudi Arabia and lower output from Venezuela and Libya too contributed to oil's rise. According to a report from independent research centre JBC Energy, crude oil supplies from Iran, Libya
and Venezuela fell to their lowest since January.
Saudi Arabia announced last week that it would suspend shipments of oil through the critical Bab el-Mandeb Strait, after Houthi rebels in Yemen attacked a pair of oil tankers in the Red Sea.
Also, there are concerns that Canada's Suncor Energy's Syncrude oil sands facility might not be fully operational anytime soon.
With the first set of sanctions on Iran to come into force on August 6, it remains to be seen how OPEC and other oil producers plan to make up for the supply shortage.
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