Investing.com – Despite a dip in crude prices on Friday in midmorning trade, oil was still headed for weekly gains as market participants looked ahead to the latest gauge of U.S. shale production.
New York-traded fell 18 cents, or about 0.3%, to $71.31 a barrel by 10:26AM ET (14:26GMT).
Meanwhile, , the benchmark for oil prices outside the U.S., slipped 5 cents, or roughly 0.5%, to $79.25 a barrel.
U.S. crude and Brent were on track for weekly gains of around 0.9% 2.8%, respectively, as looming sanctions against oil exporter Iran, the economic crisis in Venezuela and signs of strong demand supported prices this week.
Crude has seen upward momentum since President Donald Trump announced on May 8 that the U.S. was pulling out of the Iranian nuclear deal and re-imposing previous sanctions.
Market participants widely expect the move to lead to tighter global oil supplies as they make it more difficult for Iran to export oil.
Iran, which is a major Middle East oil producer and member of the Organization of the Petroleum Exporting Countries (OPEC), resumed its role as a major oil exporter in January 2016 when international sanctions against Tehran were lifted in return for curbs on Iran’s nuclear program.
Also increasing concerns over supply, unrest was building in Venezuela ahead of presidential elections on Sunday that nations including the U.S., European Union, Mexico, Brazil or Colombia have labeled as “illegitimate”.
Production in Venezuela plunged to 1.5 million barrels last month, its lowest level in decades due to its ongoing economic crisis.
On the domestic front, oil prices were also supported by bullish U.S. crude inventory data released on Wednesday by the Energy Information Administration that showed both crude and gasoline supplies fell more than expected last week.
Inventories of U.S. crude fell by barrels for the week ended May 11, beating expectations for a draw of just 0.763 million barrels, while gasoline inventories fell by barrels, beating expectations for a fall of 1.421 million barrels.
Later on Friday, the weekly installment of drilling activity from will focus investors’ attention as it provides fresh insight into U.S. oil production and demand.
Data last week showed the number of U.S. oil rigs rose for the sixth week in a row, pointing to a possible expansion in domestic output and fueling concerns that increased production stateside could eventually derail OPEC-led efforts to curb output and balance markets.
In other energy trading, rose 0.2% to $2.2534 a gallon by 10:26AM ET (14:26GMT), while advanced 0.2% to $2.2856 a gallon.
Lastly, fell 0.2% to $2.854 per million British thermal units.
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