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Oil prices little changed as profit locked in; supply worry supports

Reuters  |  NEW YORK 

By Ayenat Mersie

NEW YORK (Reuters) - prices were little changed on Tuesday as investors took profit following last week's rally above three-year highs, with prices supported by growing concern over the potential for supply disruptions.

Brent futures were down 9 cents at $71.33 a barrel by 11:50 a.m. EDT (1550 GMT), having come off an earlier high of $71.89, while U.S. crude futures slipped 8 cents to $66.14.

"We're starting to see a little of the premium come off from geopolitics, and the focus is shifting to inventories," said Bill Baruch, of in

Brent has risen 1.4 percent so far this month. It hit a peak last week of $73.09, the highest since late 2014, amid mounting tensions in the Middle East, the possibility of renewed U.S. sanctions against and falling output in Venezuela, where economic crisis has dragged down output to multi-year lows.

"The rally upwards was purely on geopolitical risk and if now we haven't had any further stimulus, we're seeing prices slip off a bit," said.

Analysts expected uncertainty over U.S. policy towards to continue to support prices through May 12, the deadline that U.S. gave to and European allies to "fix" the nuclear deal.

If does not renew sanctions relief for at this point, may have difficulty exporting its crude.

Healthy demand and coordinated crude supply cuts by the Organization of the Petroleum Exporting Countries and several partners including have made one of the top-performing commodities of 2018, with a gain of 7 percent, after wheat and corn, which have gained nearly 10 percent.

Bullish enthusiasm over the outlook for prices, however, might be contained by an increase in supplies in Cushing, Oklahoma, the delivery point for U.S. crude futures.

"We've seen that front May-June spread in WTI swing back into contango today. And that's somewhat of a implies a continued up trend in crude supply," said Jim Ritterbusch, of in Galena,

"There's not much volatility today, as we wait for and EIA data," Ritterbusch said.

The publishes weekly U.S. fuel inventory data later on Tuesday, while official government data, including on production, is due from the EIA on Wednesday.

(Additional reporting by in London; Henning Gloystein in Singapore; Editing by and Bernadette Baum)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, April 17 2018. 22:13 IST