By Henning Gloystein
SINGAPORE (Reuters) – Oil prices rose on Thursday, supported by an expectation that the United States will re-impose sanctions against Iran, a decline in output in Venezuela and ongoing strong demand.
Brent crude oil futures
U.S. West Texas Intermediate (WTI) crude futures were up 33 cents, or 0.5 percent, at $68.38 per barrel.
Traders said markets rose on expectations that the United States will in May re-impose sanctions against Iran, a major oil producer and member of the Organization of the Petroleum Exporting Countries (OPEC).
French President Emmanuel Macron said on Wednesday during a state visit to the United States that he expected Trump to pull out of a deal with Iran reached in 2015, in which Iran suspended its nuclear program in return for western powers lifting crippling sanctions.
U.S. President Donald Trump will decide by May 12 whether to restore U.S. sanctions on Tehran, which would likely result in a reduction of its oil exports.
Further pushing oil prices has been declining output in Venezuela, OPEC’s biggest producer in Latin America.
Venezuela’s crude production
U.S. oil major Chevron Corp
Venezuela’s plunging output and looming U.S. sanctions against Iran come against a backdrop of strong demand, especially in Asia, the world’s biggest oil consuming region.
However, not all market indicators point towards tighter supplies.
U.S. crude oil inventories
U.S. crude production
American crude oil output has overtaken that of top exporter Saudi Arabia. Only Russia currently produces more, at around 11 million bpd.
With U.S. output surging, some analysts warn that the 20-percent climb in Brent prices since February is starting to look overdone.
“The market does look a little toppish,” said Greg McKenna, chief market strategist at futures brokerage AxiTrader.
(Reporting by Henning Gloystein; editing by Joseph Radford and Richard Pullin)