The United States plans to impose new sanctions against Iran, which produces around four per cent of global oil supplies, after abandoning an agreement reached in late 2015 which limited Tehran’s nuclear ambitions in exchange for removing US-Europe sanctions.
Boursa Kuwait is “confident” that MSCI will upgrade it to emerging market status in 2019, according to CEO…256 Views | the publication reaches you by | BG Media London
Brent crude futures, the international benchmark for oil prices, hit their strongest since November 2014, at $77.89 per barrel shortly before 0700 GMT on Thursday, up 0.9pc from their last close.
US West Texas Intermediate (WTI) crude futures also marked a November-2014 high, at $71.84 a barrel, before edging back to $71.78 per barrel. That was-still 0.9pc above their last settlement.
In China, which is Iran’s single biggest buyer of oil, Shanghai crude futures posted their biggest intra-day rally since their launch in March, rising more than 4.5pc to a dollar-denominated record above $75 per barrel.
Analysts had little hope that opposition to the US action would prevent sanctions from going ahead.
“Europe and China will not fight against the US sanctions. They will grumble and accept it. There is no one who will realistically choose Iran over the US,” said energy consultancy FGE.
“We believe the previous 1 million bpd limit for exports (imposed during previous sanctions) will be reimposed. As before, it may take several rounds of reductions to reach target levels,” FGE’s founder and chairman Fereidun Fesharaki wrote in a note.
“Oil prices will certainly move up, and $90-100 per barrel prices may again be on the cards,” Fesharaki said.
US bank Goldman Sachs said renewed sanctions and risks to supplies elsewhere, especially in Venezuela, meant there was a strong possibility of higher prices than the bank’s summer Brent forecast of $82.50 per barrel.
The threat of new sanctions comes amid an oil market that has already been tightening due to strong demand, especially in Asia, and as top exporter Saudi Arabia and No.1 producer Russia have led efforts since 2017 to withhold oil supplies to prop up prices.
US crude inventories fell by 2.2 million barrels in the week to May 4, to 433.76 million barrels, according to the Energy Information Administration (EIA), slightly above the 420 million barrels five-year average level.
One factor that could prevent markets from tightening further is soaring US oil output.
“Higher prices are more than likely to be capped as … US shale producers turn the taps back on the longer prices remain above break-even,” said Kerry Craig, global market strategist at JP Morgan Asset Management.
Weekly US crude oil production hit another record last week, climbing to 10.7 million barrels per day (bpd).
That’s up 27pc since mid-2016 and means US output is creeping ever closer to that of top producer Russia, which pumps around 11 million bpd.
Mondrian Doha, Qatar’s leading destination from global lifestyle hospitality company sbe, is pleased to announce the launch of…576 Views | the publication reaches you by | BG Media London
Do you have information you want to reach our readers?
Doha Film Institute is dedicated to film appreciation, education, and building a dynamic film industry in Qatar that…
Science & Technology