Oil prices were little changed on Tuesday after Brent hit its highest level since November 2014, supported by strong demand, OPEC-led production cuts, and the prospect of renewed U.S. sanctions on Iran.
Brent traded as high as $75.47 and was up 4 cents at $74.75 by 11:58 a.m. EDT (1558 GMT). West Texas Intermediate (WTI) crude slipped 9 cents to $68.55, retreating from the November 2014 high it hit on Thursday.
WTI`s discount to Brent was as wide as $6.27 Tuesday, its largest since Jan. 5, on rising U.S. production.
The United States will decide by May 12 whether to quit a nuclear deal with Iran and reimpose sanctions, tightening global supplies.
Stephen Innes, head of trading for Asia-Pacific at futures brokerage OANDA, said new sanctions against Tehran "could push oil prices up as much as $5 per barrel."
U.S. President Donald Trump warned Iran on Tuesday not to follow through with threats to restart its nuclear program, as he and French President Emmanuel Macron struggled to find common ground on saving the 2015 Iran nuclear deal.
"Prices are being driven up by tight supply due to high production outages in Venezuela plus the cuts implemented by OPEC (the Organization of the Petroleum Exporting Countries) and Russia," said Carsten Fritsch, analyst at Commerzbank. "What is more, demand appears robust."
Growing U.S. demand, indicated by continued strong refinery utilization rates, is very supportive to prices, said Bob Yawger, director of energy futures at Mizuho.
"You could get rid of all of these geopolitical headlines --Syria, trade -- and if you did that, you would still have a very impressive demand situation in the United States," said Bob Yawger, director of energy futures at Mizuho.
Brent prices were at their highest since Nov. 27 2014. OPEC`s decision that day not to curb output subsequently sent prices plunging.
Oil began recovering in 2016 as OPEC discussed a return to market management with the help of Russia and other non-members. A deal to rein in output started in January 2017 and has been deepened by a steep output drop in Venezuela.
Meanwhile, demand in Asia, the biggest oil-consuming region, has risen to a record.
The latest U.S. inventory figures are expected to show a 2.6-million-barrel drop in crude stocks. [nL1N1S015M]
The American Petroleum Institute, an industry group, releases its inventory data at 4:30 p.m. EDT (2030 GMT) on Tuesday, a day before the government`s supply report.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.