Oil price edges up as US could be set to issue new Iran sanctions

While there were wide expectations for a recovery in prices, the research house believes that last year

SINGAPORE/TOKYO: Oil prices edged up on Friday on news that U.S. President Donald Trump could be poised to impose new sanctions on multiple Iranian entities, firing geopolitical tensions between the two nations.

Reuters reported that the U.S. administration is prepared to roll out new measures against more than two dozen Iranian targets following Tehran's ballistic missile test, according to sources, but the package was formulated in a way that would not violate the 2015 Iran nuclear deal.

Brent crude futures had risen 28 cents, or 0.5 percent, to $56.84 a barrel by 0123 GMT (08:23 p.m. ET), after settling down 24 cents at $56.56 in the previous session.

Front month U.S. crude futures, also known as West Texas Intermediate, climbed 29 cents, or 0.5 percent, to $53.83 a barrel, after ending Tuesday down 34 cents. For the week, the contract is up a little over 1 percent.

Oil prices have stabilized around 15 percent above the level before some producers agreed in December to curb production, National Australia Bank said in a note on Friday.

"The upward pressure on oil prices has been partly offset by rising U.S. production since October last year, which is expected to continue for the rest of 2017," the bank said.

"We now expect oil prices to average around the mid to high $50s in Q1 and Q2, before reaching the low $60s by end-2017 and stabilizing at around those levels in 2018."

Global oil output was cut by 1.4 million barrels per day (bpd) last month, Russian energy minister Alexander Novak said, as part of the deal last year between OPEC and other producers led by Russia.

Novak said Russian companies may cut oil production quicker than had been initially agreed with OPEC and added that he expected the market to rebalance by the middle of this year. - Reuters