By Amanda Cooper
LONDON (Reuters) - Oil gained on Monday as investors remained cautious over the supply outlook, having gained nearly 5 percent in price since the middle of July.
October Brent crude futures were last up 71 cents at $75.47 a barrel by 1424 GMT. The September contract expires on Tuesday. U.S. crude futures rose $1.37 at $70.06 a barrel.
The oil price has rallied almost uninterruptedly for the past two weeks, as looming sanctions on Iran have already started to curtail flows of oil from the country.
"There are a myriad of factors to follow at the moment in the oil market but one way or the other we always arrive at the same conclusion. It is the impact of the U.S. sanctions on Iran that will decide the next $15 a barrel," PVM Oil Associates Tamas Varga said in a note.
"The best case scenario is that the U.S. provides meaningful sanction waivers in the run-up to the mid-term elections and Iran can get away with a loss of around 500-700,000 barrels per day of exports. In case, however, President Trump plays hardball and puts its allies and foes under maximum pressure the loss of barrels could amount to 2 million barrels per day."
The U.S. economy grew at its fastest pace in nearly four years in the second quarter, but with Washington and Beijing at loggerheads over trade, oil prices could struggle this week, analysts said.
"Concerns around the U.S.-China trade wars continue to weigh on prices, while the halt in Saudi shipments through the Red Sea waterway has seemingly failed to provide a bullish fillip," said Stephen Innes, head of trading APAC at OANDA Brokerage.
Saudi Arabia last week said it was suspending oil shipments through the Red Sea's Bab al-Mandeb strait, one of the world's most important tanker routes, after Yemen's Iran-aligned Houthis attacked two ships in the waterway.
"Geopolitical risk in the Gulf has evolved with a stoppage of Saudi exports via the Bab al-Mandeb strait and thinly veiled remarks from Iran on the passage of oil via the strait of Hormuz," BNP Paribas head of commodity research Harry Tchilinguirian said in the Reuters Global Oil Forum.
"So all in all, supply conditions remain favourable for oil to rally."
U.S. energy companies added three oil rigs in the week to July 27, the first time in the past three weeks that drillers have increased activity, data on Friday showed.
(Additional reporting by Aaron Sheldrick in TOKYO; Editing by Louise Heavens, David Evans and Kirsten Donovan)
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