SINGAPORE (Reuters) – Oil prices rallied on Monday as US sanctions on Iran signaled a narrower market, despite worries over slowing economic growth dampened by global trade tensions.

An oil pump lift is seen at sunset in a field outside Scheibenhard, near Strasbourg, France, October 6, 2017. REUTERS / Christian Hartmann

The first half of the month crude oil futures, LCOc1, was $ 72.88 a barrel at 0053 GMT, an increase of 7 cents from the last close.

West Texas Intermediate (WTI) Crude Oil CLc1 rose 16 cents to $ 67.79 a barrel.

The US has begun to introduce new sanctions against Iran, which will affect the country's oil sector as of November.

"In the face of US sanctions against Iran … all eyes have been on the impact of crude oil exports from that country," said ANZ Bank on Monday.

"Maintaining global supply could be very difficult," the bank said, adding that "the US is doing its part to increase production, with data for drilling activities continuing to increase."

US energy companies added most drilling rigs since May last week and added 10 derricks to increase the total to 869, according to energy services company Baker Hughes.

This was the highest drilling activity since March 2015.

The oil markets could also potentially hurt as economic growth and growth in fuel demand slow, especially in the major emerging Asian economies.

"The slowdown in demand from China, the world's largest importer, comes at a critical moment when Asian demand growth is being called into question due to the negative impact of trade wars, a stronger dollar and rising financing costs," Ole said Hansen, Head of Commodities Strategy at Saxo Bank, Denmark, in a statement last week.

(For a graph on & # 39; US Drill Count & # 39 ;, click on reut.rs/2OwEL6C)

Reporting by Henning Gloystein in Singapore; Additional reporting by Gary McWilliams in Houston; Arrangement of Joseph Radford

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