Oil prices rose on Friday as U.S. sanctions against Iran threatened to
remove a substantial volume of crude oil from world markets at a time of
rising global demand.
Benchmark Brent crude LCOc1 jumped $1.49 to a high of $79.34 a barrel before easing back to around $79.00 by 1030 GMT.
U.S. light crude CLc1 was down 15 cents at $73.30. On Thursday, the contract hit its highest since November 2014 at $74.03 per barrel.
Iran is the fifth-largest oil producer in the world, pumping about 4.7 million barrels per day (bpd), or almost 5 percent of world’s oil, much of it to China and other energy-hungry nations such as India.
The U.S. government wants to stop Tehran exporting oil to cut off a vital supply of finance and hopes other big oil producers in the Organization of the Petroleum Exporting Countries and Russia will make up for the deficit.
But the world oil market is already tight and many analysts and big investors think strict enforcement of U.S. sanctions against Iran will push up prices sharply.
A Reuters survey of 35 economists and analysts on Friday forecast Brent would average $72.58 a barrel in 2018, 90 cents higher than the $71.68 forecast in last month’s poll and compared with the $71.15 average so far this year.
North American oil stocks have fallen as an outage at Canada’s Syncrude has locked in more than 300,000 bpd of production. The outage is expected to last at least through July, according to operator Suncor Energy
OPEC and Russia have said they will raise output to meet demand and replace crude from unplanned disruptions but many analysts think that the extra supply may be inadequate.
U.S. light crude CLc1 was down 15 cents at $73.30. On Thursday, the contract hit its highest since November 2014 at $74.03 per barrel.
Iran is the fifth-largest oil producer in the world, pumping about 4.7 million barrels per day (bpd), or almost 5 percent of world’s oil, much of it to China and other energy-hungry nations such as India.
The U.S. government wants to stop Tehran exporting oil to cut off a vital supply of finance and hopes other big oil producers in the Organization of the Petroleum Exporting Countries and Russia will make up for the deficit.
But the world oil market is already tight and many analysts and big investors think strict enforcement of U.S. sanctions against Iran will push up prices sharply.
A Reuters survey of 35 economists and analysts on Friday forecast Brent would average $72.58 a barrel in 2018, 90 cents higher than the $71.68 forecast in last month’s poll and compared with the $71.15 average so far this year.
North American oil stocks have fallen as an outage at Canada’s Syncrude has locked in more than 300,000 bpd of production. The outage is expected to last at least through July, according to operator Suncor Energy
OPEC and Russia have said they will raise output to meet demand and replace crude from unplanned disruptions but many analysts think that the extra supply may be inadequate.
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