Oil nears 4-year high


Crude approached a four-year high after OPEC signaled it may not replace Iranian oil that’s disappearing from global markets as US sanctions loom.
Futures rose as much as 1.7 percent in London on Tuesday. OPEC shrugged off the threat to Iranian supplies over the weekend, spurring some of the world’s most-sophisticated traders to forecast a return to $100-a-barrel oil.
At such prices, crude demand “will be annihilated,” Petromatrix GmbH’s Olivier Jakob said. In the US, oil exports probably surged last week, eroding stockpiles for a sixth straight week, according to a Bloomberg survey.
“The market is assuming that OPEC will behave as they claimed they will at this meeting, but I don’t think that’s necessarily something that will be long-lived,” said Thomas Finlon, director of Energy Analytics Group LLC in Wellington, Florida. A big reduction in Iranian exports “will cause the market to tighten up.”
Crude futures in London and New York have advanced as the Organization of Petroleum Exporting Countries and allied countries indicated they intend to match output closely to demand. That’s despite US President Donald Trump’s pressure to release more supplies and lower prices.
Trump said OPEC is “ripping off the world,” in an address to the United Nations on Tuesday in New York. Meanwhile, Iranian oil tankers are starting to disappear from global satellite tracking systems as the implementation date for the next round of sanctions approaches.
Brent for November settlement climbed 89 cents to $82.09 a barrel at 10:30 a.m. New York time on the ICE Futures Europe exchange. The global benchmark traded at a $9.56 premium to West Texas Intermediate crude.
WTI for November delivery rose 45 cents to $72.53 on the New York Mercantile Exchange. Total volume traded was about 30 percent below the 100-day average.
Meanwhile in the US, crude stockpiles fell by an estimated 500,000 barrels last week. At the key pipeline hub in Cushing, Oklahoma, inventories probably dropped by 150,000 barrels, a Bloomberg forecast showed.

Leave a Reply

Send this to a friend