Oil prices edged lower on Friday as the dollar rose, but Brent was still headed for its third week of gains amid supply concerns should the United States reimpose sanctions on Iran.

Global benchmark Brent crude futures were down 27 cents at $74.47 a barrel at 0833 GMT. This month, Brent hit highs above $75, a level last seen in late 2014.

US West Texas Intermediate (WTI) crude fell 31 cents to $67.88 a barrel. This month, WTI has gained around 4.5 per cent.

US President Donald Trump will decide by May 12 whether to reimpose sanctions on Iran that were lifted as part of an agreement with six other world powers over Tehran's nuclear programme.

Brent has added around 6 per cent this month on expectations of renewed sanctions, which would likely dampen Iranian oil exports. The gains came despite a higher dollar, which is at its strongest since January 12 against a basket of currencies.

Increases in the US currency make dollar-priced oil more expensive for holders of other currencies.

“All we're seeing is very strong pricing and the slight softening is primarily due to a stronger dollar,” said Bjarne Schieldrop, SEB chief commodity analyst.

“I don't think oil is actually taking a breather.”

Concerns about market tightness have also been fuelled by the deteriorating political and economic situation in Venezuela that has led to a 40 percent decline in crude output in the past two years.

Price increases have been capped by rising US production as shale drillers ramp up activity, underpinning a widening discount between Brent and WTI, which hit its largest since December 28.

Surging US production, which rose to 10.59 million barrels per day last week, has encouraged record-high US exports.

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