Oil eases, but Iran sanctions keep Brent above $80 a barrel

Petrol price crude oil

Iranian Minister of Petroleum has welcomed OPECs decision effectively rebuffing President Donald Trump's calls for a hike in oil output, saying USA empty dream to zero Irans oil exports would not realize.

Brent crude futures settled up 67 cents at US$81.87 a barrel. Brent hit US$82.55 per barrel, its highest since Nov 10, 2014.

U.S. West Texas Intermediate (WTI) crude futures fell 39 cents to $71.89 a barrel.

"We're on the verge of some significant volatility in Q4 2018 because depending on the severity and duration of the Iranian sanctions, the market simply does not have an adequate supply response for a 2 million barrel a day disappearance of oil from the markets", Jaeggi said.

"As a result, we expect Brent prices to stabilize back in their $70-80/bbl range into year-end", wrote the analysts.

OPEC, as well as other producers of oil, are now deliberating whether or not to increase their output by 500,000 barrels per day in order to counteract the lessened supply from Iran. Earlier, oil prices had surged on worries about global supply after U.S. sanctions on Iran's oil exports take effect Nov 4.




Global benchmark Brent is on course for its fifth consecutive quarterly increase, the longest stretch since early 2007, when a six-quarter run led to a record high of US$147.50 a barrel. The growth will come at the time when OPEC's third largest producer, Iran, has been losing clients due to USA sanctions against its oil sector which come into force on November 4.

Major oil trading houses fear the return of $100 crude oil in the upcoming three months.

It could cause Washington to take extraordinary steps, including the use of the Strategic Petroleum Reserve, to cool down the crude oil and other fuel prices ahead of the US mid-term elections. He also accused Iran of sowing chaos and promised further sanctions on the country.

OPEC leader Saudi Arabia and its biggest oil-producer ally, Russia, on Sunday rebuffed a demand from Trump for moves to cool the market.

"If he wants the price of oil not to go up and the market not to get destabilized, he should stop unwarranted and disruptive interference in the Middle East and not be an obstacle to the production and export of Iran's oil". "Given the current oil market scenario, we believe prices of crude oil are to rise around $78/bbl -$80/bbl unless the number of rigs deployed by the by the United States are increased", said credit ratings agency CARE Ratings.

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