Oil prices rose on Thursday, supported by an expectation that the US will re-impose sanctions against Iran, a decline in output in Venezuela and strong demand.
Brent crude oil futures were at 74.42 a barrel at 1.35am GMT, up 42c, or 0.6%, from their last close.
US West Texas Intermediate (WTI) crude futures were up 33c, or 0.5%, at $68.38 a barrel.
Traders said markets rose on the expectation that the US would in May re-impose sanctions against Iran, a major oil producer and member of oil cartel Opec.
French President Emmanuel Macron said on Wednesday during a state visit to the US that he expected US President Donald 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.
Trump will decide by May 12 whether to restore US sanctions on Tehran, which is likely to 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 a day in early 2016 to about 1.5-million barrels a day 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 is almost 10-million barrels above the five-year average.
American crude oil output has overtaken that of top exporter Saudi Arabia. Only Russia currently produces more, at about 11-million barrels a day.
With US output surging, some analysts warn that the 20% 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.
