Oil futures fell from their highest levels in weeks as investors await a Federal Reserve meeting later in the week for guidance on further interest rate cuts.
The declines were, however, limited by fears of supply disruptions in the event of new American sanctions against the main suppliers, Russia and Iran.
Brent oil futures were down 21 cents, or 0.3 percent, at $74.28 a barrel by 0110 GMT after hitting their highest level since November 22 on Friday.
U.S. West Texas Intermediate crude fell 30 cents, or 0.4%, to $70.99 a barrel after hitting its highest level since Nov. 7 in the previous session.
Oil prices were supported by new European Union sanctions on Russian oil last week and expectations of tougher sanctions on Iranian supply, Tony Sycamore, market analyst at IG, said in a note. .
U.S. Treasury Secretary Janet Yellen told Reuters on Friday that the United States was considering new sanctions on “black fleet” tankers and was not ruling out sanctions on Chinese banks, as it seeks to reducing Russia’s oil revenues and access to foreign supplies to fuel its war in Ukraine.
New US sanctions against entities trading Iranian oil are already driving prices of crude sold to China to their highest levels in years. The new Trump administration is expected to step up pressure on Iran.
Oil prices were also supported by interest rate cuts by central banks in Canada, Europe and Switzerland last week and forecasts of rate cuts from the Fed this week, Mr. Sycamore said.
The Fed is expected to cut interest rates by a quarter of a percentage point at its Dec. 17-18 meeting, which will also provide an updated sense of how big a rate cut Fed officials are considering in 2025 and perhaps in 2026.
Lower interest rates can boost economic growth and demand for oil.
Canada
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