2018.04.2601:45:00UTC+00Oil Prices Climbed on Iran Sanctions Concerns, Declining Venezuelan Output

Oil prices edged up on Thursday, propped up by an expectation that the U.S. will re-impose punitive measures against Iran, a fall in production in Venezuelan and ongoing solid demand.

Brent crude oil futures stood at $74.42 per barrel, 42 cents or 0.6 percent up from their last settlement. U.S. WTI crude futures traded up 33 cents or 0.5 percent at $68.38 per barrel.

According to traders, markets climbed on expectations that the U.S. will in May re-impose sanctions against Iran, a major oil producer and member of the Organization of the Petroleum Exporting Countries.

On Wednesday, during a state visit to the U.S., French President Emmanuel Macron said that he expected U.S. President Donald Trump to to withdraw from a deal with Iran reached in 2015, in which Tehran stopped its nuclear program in exchange for western powers removing the implementation of debilitating sanctions.

President Trump will decide by May 12 whether to restore U.S. sanctions on Tehran, which would likely lead in a decline of its oil exports.

Another factor driving up oil prices have been falling production in Venezuela, OPEC's largest producer in Latin America. The country's production has declined from almost 2.5 million bpd in early 2016 to around 1.5 million bpd due to political and economic crisis.

The declining production in Venezuela and the impending sanctions against Iran comes at a time of strong demand, particularly in Asia.

But not all market indicators indicate lower supplies. U.S. crude oil inventories edged up by 2.2 million barrels in the week to April 21, to 429.74 million barrels. The figures are almost 10 million barrels above the five-year average. U.S. crude output increased by 46,000 bpd on the previous week, to 10.59 bpd. That's an increase of more than a quarter since mid-2016.