Oil prices have declined on account of a rising US rig count, indicating a potential increase in crude production.
Despite the fall in prices, crude futures hovered around their highest levels in more than three years.
Brent crude futures LCOc1 fell 50 cents, or 0.7%, to reach $74.14 a barrel, remaining close to the high of $75.47 last week, according to Reuters.
US West Texas Intermediate (WTI) crude futures CLc1 decreased 28 cents, or 0.4%, trading at $67.82 per barrel.
The contracts are destined to post gains for the second consecutive month.
Phillip Futures commodities analyst was quoted by the news agency as saying: “Oil prices are hanging tight as the market remains fundamentally optimistic with declining stockpile levels and on prospective sanctions on Iran.”
In the week ending 27 April, the number of rigs in the US increased by five to reach a total count of 825, as per the data released by Baker Hughes energy services firm.
The total rig count represents the highest level since March 2015.
Since mid-2016, US crude output C-OUT-T-EIA has witnessed a growth of more than 25% to a record 10.59 million barrels per day.
The US stands second in terms of crude production, only behind Russia, which currently produces around 11 million barrels per day.
Brent prices continue to receive support from expectation that the US will re-introduce sanctions against Iran and declining output in Venezuela.
The decision on whether to enforce sanctions is expected to be arrived at before 12 May this year.
Trifecta director Sukrit Vijayakar was quoted by the news agency as saying: “Things are not quite the same as in the previous decade, when Iran was regarded as a menace and a threat. Over the last three to four years Iran has behaved itself – according to everybody.
“It’s only Trump who wants to back out of the deal, but he wants to back out of so many deals. If you keep saying about backing out, you lose credibility as a state. Everyone is feeling the pinch of OPEC cuts anyway.”
The US and its western allies revoked the previous sanctions against Iran after reaching an agreement over Iran’s nuclear programme.