Oil prices were struggling midweek to regain ground won in earlier trading amid a slight easing in US-Iran tensions and rising US inventories.

By Wednesday, oil futures were trading at the lowest level in a week despite expectations that Opec and its allied oil producers, known as Opec+, will continue to withhold supply this year.

Brent crude futures were trading at $71.79 per barrel mid-week after losing ground since Monday, when they were trading above $73 per barrel. This time last week, Brent was fetching $71.04 per barrel.

US West Texas Intermediate crude (WTI) was trading at $62.99 per barrel after hitting $63.95 per barrel in earlier trading. This time last week, WTI was fetching $61.38 per barrel.

Trading was above last week’s levels as tensions in the Middle East continue to support values after US waivers that allowed some countries to continue buying Iranian oil recently came to an end.

Tehran has also warned of relaxing restrictions on its nuclear programme in response to the US strengthening of sanctions.

US President Donald Trump kept up the anti-Iran rhetoric at the weekend, tweeting that a conflict would be the “official end” of Iran, while Saudi Arabia said it was ready to respond with “all strength” and that it was up to Iran to avoid a war.

The comments followed attacks the previous week on Saudi oil assets and the firing of a rocket on Sunday into Baghdad’s heavily fortified “Green Zone” that exploded near the US embassy.

Some staff were evacuated from the US embassy in Baghdad, while Trump had already ordered the deployment of an aircraft carrier group, B-52 bombers and Patriot missiles to the Middle East. By midweek, however, there had been no further increase in tensions with at least one US official talking of a slight reduction in tensions in the region.

Futures were also hit by further growth in US crude inventories, as data from the US Energy Information Administration (EIA) revealed an increase of 4.7 million barrels from the previous week.

In the week ending 17 May, US stocks were at 476.8 million barrels, about 4% above the five-year average for this time of year, according to the EIA.

Data also showed total gasoline inventories increased by 3.7 million barrels last week.

In addition, the market still faces uncertainty over whether Opec and other producers will continue with supply cuts that have helped boost prices more than 30% so far this year.

Opec, Russia and other non-member producers agreed to cut output by 1.2 million barrels per day from 1 January for 6 months to try to prevent inventories from increasing and weakening prices.

The group of producers is now due to meet next month to review whether to maintain the pact beyond June. A meeting had been scheduled for 25 to 26 June to discuss policy, though the group is reportedly considering moving the event to July.

Supply losses from Opec members Iran and Venezuela, now under US sanctions, have deepened the impact of the Opec-led production restrictions. However, reports suggested the group will likely maintain the cuts.

Saudi Energy Minister Khalid al-Falih said on Sunday there was consensus among Opec and allied oil producers to drive down crude inventories “gently” but that he would remain responsive to the needs of a “fragile market”.

Russia Energy Minister Alexander Novak also said an easing of cuts had been discussed and the supply situation would be clearer in a month, including from countries under sanctions.

Weekly

Prices struggle to regain ground