By HenningGloystein
SINGAPORE (Reuters) - Oilprices firmed slightly on Wednesday, supported by concerns that the United Statesmay reimpose sanctions on major exporter Iran, although soaring U.S. supplies capped gains.
Brent Crude OilFutureswere at $73.23 per barrel at 0430 GMT, up 10 cents, or 0.1 percent from their last close.
U.S. West TexasIntermediate (WTI) crude futures were up 30 cents, or 0.5 percent, at $67.55 per barrel.
Iran, a member of the Organization of the Petroleum Exporting Countries (OPEC), re-emerged as a major Oilexporter in January 2016 when international sanctions against Tehranwere lifted in return for curbs on Iran's nuclear programme.
Iran's OilExportshit 2.6 million barrels per day (bpd) in April, the OilMinistry's Newsagency SHANA reported on Tuesday, a record since the lifting of sanctions, with Chinaand Indiabuying more than half of Iran's Oil
The United States, however, has expressed doubts over Iran's sincerity in implementing those curbs and PresidentDonald Trumphas threatened to re-impose sanctions.
Trump will decide by May 12 whether to restore U.S. sanctions on Tehran, which would likely result in a reduction of its OilExports
"If Trump abandons the deal, he risks a spike in global Oilprices... The re-introduction of U.S. sanctions would hurt Iran's ability to transact in dollars," said Ole Hansen, Head Of Commodity Strategyat Saxo Bank
"A reintroduction of sanctions without seeing other OPEC-members increase production could remove an estimated 300,000-500,000 bpd of Iranian barrels," he added.
Some analysts, however, said there was a risk that price could slump as too many OilTraderswere betting on renewed sanctions.
"If the geopolitical tension subsides or results in a smaller supply disruption than currently priced in, we are likely to see a sharp pull-back in investor positioning and an even sharper correction in Oilprices than the $5 or so that might be warranted even as macro uncertainties persist," U.S. BankCitisaid in a note to investors.
Beyond the threat of new Iransanctions, other factors prevented crude prices from rising further.
U.S. crude inventories rose by 3.4 million barrels to 432.575 million in the week to March 27, according to a report by the American Petroleum Instituteon Tuesday.
Rising inventories are in part a result of soaring U.S. production, which has jumped by a quarter in the last two years to 10.6 million bpd, making the United Statesthe world's number two Crude OilProducerbehind only Russia, with 11 million bpd.
More U.S. Oilwill likely flow. U.S. drillers added five OilRigslooking for new production in the week to April 27, according to Energy Servicesfirm Baker Hughes, bringing the total count to a March 2015 high of 825.
(Reporting by HenningGloystein; editing by Richard Pullin)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)