Oil prices edged down Friday, retreating from multi-year peaks in the prior session on hopes that substitute supplies could replace an impending decline in Iranian exports from U.S. sanctions.
The U.S. plans to renew sanctions against Iran, which pumps out around 4 percent of overall global oil supplies, after withdrawing from an agreement brokered in late 2015 that curbed Tehran’s nuclear ambitions in exchange for lifting U.S.-Europe sanctions.
The punitive measures come amid a tightening oil market, stemming from solid demand particularly in Asia, and OPEC members, along with other producers, headed efforts since 2017 to limit oil supplies to drive up prices.
Brent crude futures traded at $77.34 per barrel, falling 13 cents or 0.2 percent from their last settlement. In the previous day, Brent reached its highest level since November 2014 at $78 per barrel.
U.S. WTI crude futures were down 7 cents at $71.29 per barrel, not far from Thursday November 2014 high of $71.89 per barrel. Majority of analysts expect oil prices to significantly climb, as the market prices in looming U.S. sanctions and Iran’s exports slide aming strong demand.
But there are indications that other suppliers from within the OPEC will boost production to offset the Iran production disruption.
Outside the cartel, surging U.S. crude oil output may help to fill Iran’s supply gap, reaching another record high in the previous week by rising to 10.7 million bpd.
The material has been provided by InstaForex Company – www.instaforex.com