By Stephanie Kelly
NEW YORK (Reuters) - Oil futures rose on Monday after OPEC sources said Saudi crude production unexpectedly fell in July, raising concerns about global oil supplies as the United States prepares to reinstate sanctions against major exporter Iran.
Brent crude futures rose 94 cents to $74.15 a barrel, a 1.3 percent gain, by 11:25 a.m. EDT (1525 GMT).
U.S. West Texas Intermediate (WTI) crude futures rose $1.23 to $69.72 a barrel, a 1.8 percent gain.
Saudi Arabia pumped around 10.29 million barrels per day (bpd) of crude in July, two OPEC sources said on Friday, down about 200,000 bpd from a month earlier.
"The Saudis are reining in production gains in an attempt to maintain Brent pricing" at about $70 to $75 a barrel, Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.
U.S. investment bank Jefferies said in a note that "the Saudi and Russian production surges appear to be more limited" than expected, adding that the imminent reinstatement of U.S. sanctions against Iran also fed bullish sentiment.
Some of the sanctions will come back on Tuesday at 12:01 a.m. EDT (0401 GMT). The United States also plans to re-introduce sanctions on Iranian oil in November, which could dent the OPEC member's output.
Renewed sanctions are part of Trump administration's strategy to deny resources to the Iranian leadership.
Most Iranian crude exports go to China and India, but roughly 20 percent go to Europe, where refiners have already cut their purchases.
"Admittedly, oil production there is surging from one record high to the next. However, low pipeline capacities in particular are preventing any more pronounced increase, and are delaying the rebalancing of global supply and demand."
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)