Oil Price Jumps To Four-Year High, Nears $81

Cornelia Mascio
Settembre 25, 2018

However, Khalid al-Falih, who was attending a meeting of oil producers in Algiers, left the way open to a future production hike, as supplies tighten due to Washington imposing sanctions on Iranian oil from November. The U.S. Energy Information Administration (EIA) expects domestic crude oil production will increase over the next five years and then flatten after 2022, staying at about 11 million to 12 million barrels per day through 2050. However, the consensus has now moved to as much as 1.5 million barrels daily as the U.S.is "incredibly serious" about its measures, he said.

"It's going to be significantly less than it was, and probably lower than most people expected when the sanctions were announced - hence the higher prices", Luckock said at the APPEC event.

Brent crude hit its highest since May at $80.47 per barrel, up $1.63 or more than 2 per cent, before easing back slightly to around $80.40 by 0730 GMT. per cent light crude was $1.18 higher at $71.96.

They have reportedly been discussing raising output by half a million barrels a day to counter falling supply from Iran.

Oil prices LCOc1 have been rising since early 2017, when the Organization of the Petroleum Exporting Countries (OPEC) together with other suppliers including Russian Federation started withholding output to lift crude values. The biggest source of new global supply, USA shale, is also experiencing growing pains as pipeline bottlenecks and workforce issues hamper growth.

Brent has been trading just below $80 a barrel, backed by concerns of supply shortages from looming US sanctions against Iran, which are set to take effect in November.

"Last week, Mr. Trump verbally attacked OPEC and some traders thought we might see an increase in supply from the United States' Middle Eastern allies".

For consumers, that could mean higher gas prices on the way, but it's good news for Canadian oil producers and helped boost stock prices in Toronto today. Money managers' wagers on higher Brent crude prices are having their longest streak since November 2017, according to ICE Futures Europe data.

The U.S., which isn't an OPEC member and has in recent years seen a renewed boom in shale oil, will continue to grow as a crude producer, peaking in the late 2020s.

One problem is the uncertainty over how much oil will be lost when the US -led sanctions against Iran begin in November. The biggest source of new global supply, USA shale, is also experiencing growing pains as pipeline bottlenecks and workforce issues may hamper growth, he said.

"Were they do so the oil market would be even more uncomfortably tight than we forecast for 2019 as spare capacity is eroded", Mr Bell added.

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