At $84, Oil Hits Highest Since 2014

Marcus Newton
October 4, 2018

This week, oil prices rose above $82 per barrel for the first time since 2014 as Iran is losing its crude exports ahead of Trump's sanctions against it oil sector coming into force early November.

USA oil prices hit their highest level since November 2014 on Tuesday and Brent crude was also near a four-year.

Brent has risen by around 20 percent from the most recent lows in August.

Brent crude, the global benchmark, settled 0.2% lower at $84.80 a barrel.

On Monday, Oilprice.com reported that production from Organization of Petroleum Exporting Countries (OPEC) rose by 90,000 bpd in in September, to hit 32.85 million bpd.

Last week, Brent crude rose above the $80 per barrel mark as the market tightened and after Saudi Arabia and Russian Federation ruled out any immediate increase in production despite calls by US President Donald Trump for action to raise global supply. "This increases the growth prospects not only for Canada and the US, but for North America as a whole". The national unleaded average gas price was $2.875/gal on Friday, according to AAA, up 1.4% in the past month and 11.7% higher than a year ago.

Oil extended gains after the longest quarterly rally in a decade as a slowdown in American drilling added to supply risks while the US and Saudi Arabia discussed market stability.

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Higher oil prices and a strong United States dollar could hit demand growth next year, analysts said.

Five analysts estimated that crude stocks rose about 1.1 million barrels in the week ended September 28.

Fears are growing that the constriction of Iranian exports by USA sanctions and the collapse of Venezuela's oil industry will leave a deep shortfall in the market.

Despite the market's bullish sentiment in recent days, JBC noted that oil inventories aren't drawing down the way they were at this time past year, and said there are some signs of slackening demand for oil.

"There is concern in the market that the loss of barrels from Iran and Venezuela is not going to be made up for through extra supplies from particularly Saudi Arabia and Russian Federation", said Gene McGillian, manager of market research at Tradition Energy.

With about 1.5 million barrels per day of Iranian oil expected to go offline on Nov 4, prices could "rocket higher with the flashy US$100 per barrel price tag indeed a reasonable-sounding target", he said. While top traders predict oil may reach $100 a barrel, concerns remain over waning demand as the U.S.

Other reports by MaliBehiribAe

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