Economy

Brent oil surges above $80 for first time since 2014

Brent oil surges above $80 for first time since 2014

Worldwide efforts to reduce air pollution has lifted the hopes of oil traders, as new shipping regulations are expected to boost demand for lower sulfur fuels, raising demand for crude, as the bank's analysts report.

The decision by US President Donald Trump to withdraw from the Iran deal "has switched the focus of oil market analysis from the fundamentals to geopolitics", the International Energy Agency wrote in its regular monthly report.

Fox News contributor John Layfield on the impact of rising oil prices on the US economy. "It would be extraordinary if such a large jump did not affect demand growth, especially as end-user subsidies have been reduced or cut in several emerging economies in recent years".

Brent broke through $80 for the first time since November 2014 on Thursday.

The oil market retained support from the concerns over US sanctions on Iran as traders bet it would reduce global crude supplies.

Oil's rise to $80/bbl is stoking concerns that the price rally will erode demand, but OPEC's giants so far aren't anxious.

In the world's biggest oil-producing region, Saudi Arabia in April pumped the least crude since output cuts began in early 2017, with all Opec members except Iraq exceeding or matching pledged curbs that were aimed at shrinking a global glut.

This how much WTI is up this year.
Bloomberg
This how much WTI is up this year. Bloomberg

Throughput growth, however, is not sufficient to cover all refined products demand, with stock draws expected to persist through 2Q18 and 3Q18, IEA experts believe.

Spot crude oil cargo prices are at their steepest discounts to futures prices in years as sellers are struggling to find buyers for West African, Russian and Kazakh cargoes, while pipeline bottlenecks trap supply in west Texas and Canada.

Crude this month has been touching levels last seen more than three years ago as global supplies tighten amid fears over the implications of the Iran nuclear accord break-up.

Russian Federation and China yesterday moved to extend their economic influence in Iran, while European Union said they will begin moves to block the effect of U.S. sanctions on Iran in the bloc from Today.

The nationwide inventory estimate contrasts with forecasts in a Bloomberg survey that show stockpiles declined by 2 million barrels.

Gasoline inventories were down by 3.8 million barrels last week, after a total 2-million-barrel build in the prior 14 days. Now, up to a third of its remaining one million barrels a day in exports are at risk because of the near-collapse of the state oil company, sanctions and the new confrontation with ConocoPhillips. The IEA acknowledged attention of market participants has shifted away from inventories to price volatility.


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