NEW YORK: Oil prices gained on Thursday as the risk of renewed U.S. sanctions on Iran, plunging Venezuelan output, and robust global demand shook off the effects of a strong dollar.
Global benchmark Brent crude futures gained 74 cents to settle at $74.74 a barrel, while U.S. West Texas Intermediate (WTI) crude were up 14 cents to $68.19 a barrel.
"Oil has had a very good week so far given what the dollar has done," said Bill Baruch, president of Blue Line Futures in Chicago.
The dollar against a basket of currencies hit its highest since mid-January. A stronger greenback makes it more expensive to buy dollar-denominated commodities like oil.
"The dollar has held crude back from gaining further ground. I expect the market to have a good finish for the week given the uncertainty around the Iran deal," Baruch said.
A top adviser to Iran's supreme leader said Tehran would not accept any change to the 2015 nuclear deal, as Western signatories prepare a new package in the hope of persuading U.S. President Donald Trump to stick with the accord.
This comes a day after French President Emmanuel Macron said he expected Trump to pull out of the agreement.
Trump will decide by May 12 whether to restore the sanctions, which would probably result in a reduction of Iranian oil exports. Brent has gained about 6 percent this month thanks to expectations that the United States could do so.
"The rally seems to be intact and is looking for the next spark to push it higher. That spark could come from reinstituting sanctions. But not only is there the possibility of sanctions on Iran, but there's also the possibility of Venezuelan and Russian sanctions," said Gene McGillian, manager of market research at Tradition Energy in Stamford, Connecticut.
Venezuelan oil output has already tumbled forty percent in two years, and the European Union said earlier this month it could impose further sanctions on Venezuela if it believes democracy is being undermined there.
Trade data in Thomson Reuters Eikon shows seaborne imports of crude by Asia's main buyers will hit a record this month.
By end-April, China will likely have taken in more than 9 million bpd of crude - its most ever and nearly 10 percent of global consumption.
The equities market, with all three major indexes up, was also supporting oil, said Walter Zimmerman, chief technical analyst at United-ICAP.
"Crude needs help from the stock market to sustain any new highs," he said.
Meanwhile, surging U.S. production, which hit 10.59 million bpd last week, has encouraged record-high U.S. exports.