Oil Prices Steady Amid US Sanctions Against Iran
- Author: Darren Santiago May 15, 2018,
May 15, 2018, 15:07
Crude oil futures pushed higher again in European morning trading Tuesday, with geopolitical risk remaining elevated and the market still digesting OPEC's higher forecasts for global demand this year.
"Iran jitters helped push oil prices higher but a broader stabilization of crude futures near 3½-year highs can be tied to several big, prevailing trends", according to CNBC. By 8am GMT, Brent was up 20c at $78.43.
U.S. West Texas Intermediate (WTI) crude futures were at $70.88 a barrel, down 8 cents, though still not far off their November 2014 high of $71.89 a barrel reached last week.
A almost 200% jump in oil prices over the past two-plus years could soon create a "particularly hostile environment" for global investors, Citibank economists warned Monday.
"Strong global oil consumption has come up against a 1½ -year-old deal led by OPEC and Russian Federation to manage crude supply among producers".
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The revised demand growth predictions come at a time when the global crude market is also facing other significant supply-side question marks, such as the impact of the imposition of USA sanctions on Iranian output and the ongoing struggles of the Venezuelan oil sector. In China, the world's biggest oil importer, refinery runs rose almost 12% in April compared with the same month a year ago, to about 12.06-million barrels per day (bpd), marking the second-highest level on record on a daily basis, data showed on Tuesday.
The tightening market has just about solved the global supply overhang that has weighed down oil prices between 2014 and 2017.
The price of world benchmark Brent crude has risen over the past 28 months, from roughly $26 a barrel in early 2016, to approximately $77/Bbl Monday, as the balance between supply and demand continues to tighten, Kallanish Energy understands.
OPEC figures published on Monday showed that oil inventories in OECD industrialized nations in March fell to 9 million barrels above the five-year average, down from 340 million barrels above the average in January 2017.
The Permian basin in Texas, the biggest US oil patch, is expected to see output climb 78,000 bpd to a fresh record of 3.28 million bpd.