Oil prices remained steady after witnessing a slight increase earlier in the day as fears of potential US sanctions against Iran gripped markets.
US West Texas Intermediate (WTI) crude futures decreased five cents to trade at $68.38 per barrel, while Brent crude oil futures dropped ten cents to reach $73.52, according to Reuters.
A decision is set to be made by 12 May on whether to renew sanctions on Iran.
ANZ analysts Daniel Hynes and Soni Kumari were quoted by the news agency as saying: “Rising geopolitical risks have been a big factor behind oil’s strong rise this year.
“The extent of the rally would have been significantly weaker if not for the recent tightness in the market. We expect the market to tighten even further in H2 2018.”
The US has asked its western allies to make some changes to the nuclear agreement reached with Iran in 2015.
International forces, including the US and its European allies, lifted the sanctions in 2015 in exchange for restrictions on Iran’s nuclear programme.
Guotai Junan Futures Crude Research head Wang Xiao was quoted by the news agency as saying: “Current prices reflect a premium for Iran uncertainties. Investors are worried about supplies after Iran took a tough stance in its response to the US.”
The news agency reported that European nations are working on safeguarding their business relations with Iran, in case the US proceeds with renewal of sanctions.
Other factors placing a lid on rise in oil prices include rising US crude inventories and crude production.
In the week up to 27 April, crude inventories increased 6.2 million barrels to reach 435.96 million barrels, according to data released by the US Energy Information Administration (EIA).
In terms of production, the US produces more crude than Saudi Arabia, which heads the Organization of the Petroleum Exporting Countries (OPEC).
Since mid-2016, the US oil production surged by more than a quarter and currently stands at 10.62 million barrels per day.