Investing.com – WTI crude oil prices settled lower after hitting a three-and-a-half year high on Tuesday as the prospect of global supply disruptions remained elevated amid looming sanctions on Iran and falling Venezuelan crude output.
On the New York Mercantile Exchange crude futures for July delivery fell 11 cents to settle at $72.13 a barrel, while on London's Intercontinental Exchange, Brent rose 0.52% to trade at $79.63 a barrel.
The United States imposed new sanctions on Venezuela on Monday following President Nicolas Maduro re-election on Sunday – viewed as illegitimate.
While the immediate sanctions were aimed at restricting the South American country from selling assets, reports said sanctions on the country’s oil industry may soon follow.
Venezuelan production would likely fall below 1 million barrels per day before the end of the year, Citigroup said on Monday.
The prospect of lower output from Venezuela raised expectations that the market will be undersupplied as Iran sanctions loom and global demand rises.
The United States on Monday, meanwhile, threatened even tougher sanctions against Iran as U.S. Secretary of State Mike Pompeo claimed the sanctions would be the “strongest in history when complete.”
“Our expectation for balancing, from a market currently in deficit, has been pushed to the second quarter of 2019 from the third quarter of 2018 period we expected previously," Citigroup said.
Heading into settlement, meanwhile, sentiment on oil prices were also supported by expectations U.S. crude supplies would fall for a third-straight week.
A fresh batch of inventories data from the U.S. Energy Information Administration data at 10:30 EDT on Wednesday is expected to show U.S. crude stockpiles fell by 1.567 million barrels last week.