Oil prices held near one-month highs on Friday and were poised for a third weekly gain on a tightening global supply outlook after the U.S. imposed tariffs against countries buying oil and gas from Venezuela and placed restrictions on Iranian oil trade.
Brent crude futures dipped 8 cents, or 0.1%, at $73.95 a barrel as of 0213 GMT. U.S. West Texas Intermediate crude futures were also down 8 cents, or 0.1%, to $69.84 a barrel at 0049 GMT.
The moves were minor compared to the gains of over 2% for both contracts so far this week.
U.S. president Donald Trump on Monday announced new 25% tariffs on potential buyers of Venezuelan crude, days after U.S. sanctions targeting China’s imports from Iran.
The order added fresh uncertainty to buyers and saw trade of Venezuelan oil to top buyer China stall. Elsewhere, sources said India’s Reliance Industries, operator of the world’s biggest refining complex, will halt Venezuelan oil imports.
Oil was also underpinned by signs of better demand in the U.S., the world’s top oil consumer, as the country’s crude stocks fell more than anticipated.
Data by the Energy Information Administration showed U.S. crude inventories fell by 3.3 million barrels to 433.6 million barrels in the week ended March 21, compared with analysts’ expectations in a Reuters poll for a 956,000-barrel draw.
The broader global dynamics for oil trade, however, pointed to a period of heightened uncertainty, as a blitz of U.S. tariffs against trading partner countries raises fears of a sharp economic downturn in a blow to oil demand.
As a result, analysts don’t expect sharp gains in oil prices to be sustained in the current environment.
Source: Reuters