Oil rises to 3½-year high, as United States crude inventory drops

Oil hits high

Oil hits high

The IEA lowered its demand forecast for 2018 by 40,000 bpd - not a massive revision, but notable because it offers some signs that demand will slow as prices rise. The International Energy Agency on Wednesday warned that demand could be sapped by higher-than-expected prices.

Several banks have in recent days raised their oil price forecasts, citing tighter supplies and strong demand.

Brent crude futures briefly hit $80 and were up 69 cents at $79.97 per barrel by 7;55 a.m. ET.

That was the contention of four OPEC delegates speaking to Reuters on condition of anonymity; they argued that "prices are high just because of the [geopolitical] tensions", and that prices "may exceed $80 and then go down".

Members of OPEC, including Saudi Arabia, Kuwait and the United Arab Emirates, said they have enough capacity to fill in any supply gap if renewed sanctions curtail Iran's exports.

"It is too soon to say what will happen this time, but we should examine whether other producers could step in to ensure an orderly flow of oil to the market and offset a disruption to Iranian exports", the agency said.

Geopolitics has taken over the oil market, driving oil prices up to three-year highs.

"The fact is that crude oil prices have risen by almost 75 percent since June 2017", the IEA's report added.

Iran exported a total 2.6 million bpd of crude in April, a record since the lifting of sanctions in January 2016, according to the news service for the country's oil ministry.

Opec and its allies have finally succeeded in their 16-month campaign to clear a global oil glut, with inventories falling below their five-year average for the first time since 2014, the agency said.

Brent crude has been rising in recent months as supplies tighten and the decision by Donald Trump to pull out of an global nuclear deal with Tehran has added to the upward pressure.

A rapid decline in Venezuela's crude production has further roiled markets in recent months.

The Organization of the Petroleum Exporting Countries and other large oil producers led by Russian Federation, have agreed to cut their combined oil output by 1.8 million bpd to reduce bloated global oil inventories and support prices.

However, the tailwinds for crude oil now vastly outnumber the headwinds, so prices will likely continue upwards in the coming days, especially in light of the escalation in Israel following the move of the USA embassy from Tel Aviv to Jerusalem that ignited protests in Gaza, prompting an immediate military response from the IDF.

Is $100-$3.60 per gallon gasoline in the USA -or higher possible?

US crude stockpiles slipped for a second week as the summer driving season approaches, government data showed yesterday.

"During the meeting, Mr. Khoshrou conveyed Mr. Zarif's message that Iran hopes China will maintain the levels of imports", said one person briefed on the meetings.

A huge boom in oil prices over the past year - with prices rising 75 percent since last July - will also likely have an effect on demand.

The push for higher oil prices has been, in large part, engineered by Saudi Arabia to pay for its domestic programs.

Recommended News

  • Pregnant Broadway Actress Injured In Car Crash Loses Unborn Baby

    Pregnant Broadway Actress Injured In Car Crash Loses Unborn Baby

    Dorothy Burns, the driver of the vehicle, plead not guilty to several charges including manslaughter. "This should never happen". Ruthie won a Tony Award for Best Featured Actress in a Musical for her role in the 2015 revival of The King And I .
    Tesla driver had hands off wheel before Utah crash, says report

    Tesla driver had hands off wheel before Utah crash, says report

    It is the third Tesla crash since January that the NHTSA is investigating that may have been linked to autopilot. The Autopilot system includes visual and audio warnings to drivers when they remove their hands from the wheel.
    Chrissy Teigen Gives Birth to Second Child With John Legend

    Chrissy Teigen Gives Birth to Second Child With John Legend

    The TV star and model tweeted "Somebody's herrrrrrre!" along with two baby bottle emojis and two smiling face emojis. Her husband, John Legend retweeted the post.
  • US Senate votes to restore net neutrality

    US Senate votes to restore net neutrality

    Senator Chuck Schumer, the Senate minority leader, said in a speech before the vote to get in touch with Republican senator. A democratic MA senator introduced an effort to preserve neutrality, and it passed the senate floor with a 52 to 47 vote.
    SC Collegium Again Defers Decision to Re-Recommend Justice KM Joseph

    SC Collegium Again Defers Decision to Re-Recommend Justice KM Joseph

    Three candidates have been nominated for a vacancy on Colorado's Supreme Court, created by Chief Justice Nancy Rice's retirement. The government had objected to his appointment, saying he was too junior to become a Supreme Court judge .
    Angry White Dude's Rant About People Speaking Spanish In NYC Goes Viral

    Angry White Dude's Rant About People Speaking Spanish In NYC Goes Viral

    Schlossberg was founded in June 2012 and specializes in "complex commercial matters", including insurance. "So, my next call is to ICE to have each one of 'em kicked out of my country", the irate man continues.
  • Juventus great Gianluigi Buffon afraid of retirement

    Juventus great Gianluigi Buffon afraid of retirement

    He added: "It meant working hard, suffering, sweating, even improving although I was 32 years old and had won the World Cup". Over the next three days, full of emotion, I will, after two or three days of reflection, make a definitive decision.
    SC upholds Khaleda's bail in graft case

    SC upholds Khaleda's bail in graft case

    The Bangladesh High Court granted bail to Opposition leader and former Prime Minister Khaleda Zia on Thursday, BDNews24 reported. He said Khaleda was shown arrested in the cases filed with different police stations in Cumilla, Dhaka , Narail and Panchagarh.
    OnePlus 6 to launch in India today

    OnePlus 6 to launch in India today

    The kicker for such a good looking device is the price - at 4199 yuan (AU$875) it is more expensive than the non Avengers phone. The phone comes with 3,300 mAh battery and like the previous variant , also supports Dash Charge through its USB Type-C port.
  • Venezuela Launches Commission to Investigate Prison Riot

    Venezuela Launches Commission to Investigate Prison Riot

    The 26-year-old travelled to Venezuela in 2016 to marry a fellow Mormon he met on the internet. The people have taken the entire prison, they're outside, they're trying to break in.
    Allan McGregor 'Buzzing' After His Rangers Return is Confirmed

    Allan McGregor 'Buzzing' After His Rangers Return is Confirmed

    We need to make this place [Ibrox] a fortress where nobody wants to come, we need to win games, no matter who you are playing. In his first spell with Rangers he won 11 major trophies, including a hat-trick of league titles in 2009, 2010 and 2011.
    Tioga Downs to allow sports betting in wake of Supreme Court ruling

    Tioga Downs to allow sports betting in wake of Supreme Court ruling

    Because of what the court did Monday, soon a majority of states probably will be regulating and taxing legalized sports gambling . In California you can order marijuana deliveries using an app, but you can't place a bet with a bookie on a basketball match.

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.