OIL IS poised for a second monthly advance, propelled by the prospect of a disruption in Iranian supplies and as Opec closes in on its target of wiping out a global glut.
U.S. President Donald Trump has until May 12 to decide whether to restore the sanctions on Iran that were lifted after an agreement over its disputed nuclear programme.
Meanwhile, Opec is trimming output even after concluding it has cleared 97 per cent of the surplus that has weighed on prices.
Prior to Israeli Prime Minister Benjamin Netanyahu's disclosure of the Iranian filed, French President Emmanuel Macron made a joint announcement with the office of Iranian President Hassan Rouhani in which the two leaders would work together on preserving the 2015 deal. Still, expanding American drilling activity continues to limit price increases.
"Although the overall U.S. oil rig count rose by five, the prolific Permian region saw oil rigs decline by one", Anthony Headrick, energy market analyst and commodities futures broker at CHS Hedging LLC, said in an email.
"Prices have rallied as Opec and its allies including Russian Federation have eroded global inventories and as geopolitical risks surrounding the U.S. and the Middle East have increased this month".
US West Texas Intermediate (WTI) crude futures were at $67.89 a barrel, down 21 cents, or about 0.3 per cent, from their last settlement.
OPEC and its partners agreed to cut oil output by 1.8 million barrels per day since January a year ago, an effort which has recorded a 149 percent success, and has boosted prices to $74 per barrel as at Thursday. Total volume traded was about 8% below the 100-day average.
There is a price divergence between WTI and Brent crude oil that could raise concerns with some traders, but can be explained easily so I don't think it is a major issue. The global benchmark crude traded at a US$6.43 premium to June WTI.
Brent crude, the worldwide benchmark traded in London, closed at a level not see since late 2014. Futures for September delivery had risen 0.6% to 444.2 yuan per barrel on Friday, gaining 5.7% this month.
"They want to try and work out a deal that could be independent of any kind of Trump walk-away", said Bob Yawger, director of futures at Mizuho Securities USA Inc.in NY. "Reimposing U.S. sanctions is not a foregone conclusion just yet". Prices climbed as high as $75.47 last week, levels not seen since November, 2014.
On Friday, the Baker Hughes rig count in the USA showed a gain of five rigs in the week to April 27, the fourth consecutive weekly rise, bringing the total rig count to 825.