File photo. Photograph:( 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 were at 74.42 per barrel at 0135 GMT, up 42 cents, or 0.6 percent, from their last close.
US 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 programme in return for western powers lifting crippling sanctions.
US 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 has fallen from almost 2.5 million barrels per day (bpd) in early 2016 to around 1.5 million bpd due to political and economic turmoil.
US oil major Chevron Corp has evacuated executives from Venezuela after two of its workers were imprisoned over a contract dispute with state-owned oil company PDVSA.
Venezuela's plunging output and looming US 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.
US crude oil inventories rose by 2.2 million barrels in the week to April 20, to 429.74 million barrels. That's almost 10 million barrels above the five-year average.
US crude production rose by 46,000 barrels per day (bpd) on the previous week, to 10.59 bpd. That's an increase of more than a quarter since mid-2016.
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.