Oil prices were supported by supply concerns amid prospects that the United States could reimpose sanctions on Iran, while Opec-led producers continue to withhold output.
Brent crude futures, the international benchmark, had dipped 50 cents, or 0.7 per cent, to $ 74.14 a barrel by 0633 GMT. Prices climbed as high as $ 75.47 last week, levels not seen since November, 2014.
US West Texas Intermediate (WTI) crude futures were at $ 67.82 a barrel, down 28 cents, or about 0.4 per cent, from their last settlement.
“Oil prices are hanging tight as the market remains fundamentally optimistic with declining stockpile levels and on prospective sanctions on Iran,” Benjamin Lu, commodities analyst at Singapore-based broker Phillip Futures, said in a note.
US drillers added five oil rigs in the week to April 27, bringing the total count to 825, the highest level since March 2015, General Electric’s Baker Hughes energy services firm said.
Crude production in the United States <C-OUT-T-EIA> has soared more than 25 per cent since mid-2016 to a record 10.59 million barrels per day (bpd). Only Russia currently produces more, at around 11 million bpd.
Meanwhile, Brent prices have gained nearly 6 per cent this month, buoyed by expectations the United States will renew sanctions against Iran.
US President Donald Trump has until May 12 to decide whether to restore the sanctions on Iran that were lifted after an agreement over its disputed nuclear programme.
“Things are not quite the same as in the previous decade, when Iran was regarded as a menace and a threat. Over the last three-four years Iran has behaved itself – according to everybody,” said Sukrit Vijayakar, director of energy consultancy Trifecta.
“It’s only Trump who wants to back out of the deal, but he wants to back out of so many deals … If you keep saying about backing out, you lose credibility as a state. Everyone is feeling the pinch of Opec cuts anyway,” Vijayakar added.
Re-imposed sanctions on Iran, Opec’s third-largest producer, would probably result in a reduction of Iranian oil exports, tightening global supplies even more.
Further backing oil prices are declining output in Venezuela, Opec’s biggest producer in Latin America, and Angola, Africa’s second-largest exporter. (Reporting by Koustav Samanta in Singapore.