Oil hovers below 6-month high amid some easing of supply concern

Oil prices slipped below six-month highs on Wednesday after signs that cushioned a rally based on fears of tight supply resulting from OPEC output cuts and U.S. sanctions on Venezuela and Iran. U.S. crude stocks rose by 6.9 million barrels last week, more than expected, data from the industry group American Petroleum Institute showed on Tuesday.

Official stocks figures are due at 1430 GMT on Wednesday. “The focus will return today to the micro-picture of the U.S. data,” Petromatrix’s Olivier Jakob said in a note. Also bearish, the International Energy Agency, a watchdog for oil-consuming countries, said on Tuesday markets are “adequately supplied” and that “global spare production capacity remains at comfortable levels.”

Brent crude futures were at $74.37 per barrel at 1047 GMT, down 14 cents from their last close. The benchmark is still set for its fifth consecutive weekly gain. U.S. West Texas Intermediate (WTI) crude future were at $65.97 per barrel, down 33 cents – not enough to steer them away from what is set to be their eighth week of gains.

Crude oil prices for spot delivery rallied after the United States said on Monday it would end all exemptions for sanctions against Iran, demanding countries halt oil imports from Tehran from May or face punitive action. China, Iran’s biggest oil customer, has formally complained about the move. The spot price surge has put the Brent forward curve into steep backwardation, in which prices for later delivery are cheaper than for prompt dispatch.