Brent crude oil futures LCOc1 were at 74.27 per barrel at 0643 GMT, up 27 cents, or 0.4 percent, from their last close.
U.S. West Texas Intermediate (WTI) crude futures were up 14 cents, or 0.2 percent, at $68.19 per barrel.
Traders said markets climbed 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 that he expected U.S. President Donald 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.
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 PRODN-VE 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.
U.S. oil major Chevron Corp (CVX.N) 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 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 C-STK-T-EIA 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.
U.S. crude production C-OUT-T-EIA climbed 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.
The soaring U.S. output has made WTI crude around $6 per barrel cheaper than Brent, the international benchmark for oil prices.
Dutch bank ING said “the wide discount for WTI to Brent saw exports rising 582,000 bpd week-on-week to a record high of 2.33 million bpd.”
With U.S. output and exports 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.
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