Oil prices inch down but gain support from Iran concerns

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LONDON (Reuters) – Oil prices edged decrease on Friday because the greenback rose, but Brent was nonetheless headed for its third week of features amid provide concerns ought to the United States reimpose sanctions on Iran.

Oil pumps are seen at sundown exterior Vaudoy-en-Brie, close to Paris, France April 23, 2018. REUTERS/Christian Hartmann

Global benchmark Brent crude futures LCOc1 had been down 27 cents at $74.47 a barrel at 0833 GMT. This month, Brent hit highs above $75, a stage final seen in late 2014.

U.S. West Texas Intermediate (WTI) crude CLc1 fell 31 cents to $67.88 a barrel. This month, WTI has gained round four.5 p.c.

U.S. President Donald Trump will resolve by May 12 whether or not to reimpose sanctions on Iran that had been lifted as a part of an settlement with six different world powers over Tehran’s nuclear program.

Brent has added round 6 p.c this month on expectations of renewed sanctions, which might doubtless dampen Iranian oil exports. The features got here regardless of a better greenback .DXY, which is at its strongest since Jan. 12 towards a basket of currencies.

Increases within the U.S. foreign money make dollar-priced oil dearer for holders of different currencies.

“All we’re seeing is very strong pricing and the slight softening is primarily due to a stronger dollar,” stated Bjarne Schieldrop, SEB chief commodity analyst.

“I don’t think oil is actually taking a breather.”

Concerns about market tightness have additionally been fueled by the deteriorating political and financial scenario in Venezuela that has led to a 40 p.c decline in crude output up to now two years. PRODN-VE

Price will increase have been capped by rising U.S. manufacturing as shale drillers ramp up exercise, underpinning a widening low cost between Brent and WTI, which hit its largest since Dec. 28. WTCLc1-LCOc1

Surging U.S. manufacturing, which rose to 10.59 million barrels per day final week, has inspired record-high U.S. exports.

(Graphic: Global oil inventories relative to demand – reut.rs/2Js9DCI)

Additional reporting by Aaron Sheldrick in Tokyo; Editing by Dale Hudson

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