Uche Usim, Abuja
Crude oil prices soared to a four-year high on Tuesday, propelled by imminent United States sanctions on Iranian crude exports and the apparent reluctance of OPEC and Russia to raise output.
Raising of output would offset the potential sanction hit to global supply.
Brent crude futures were up 61 cents at 81.81 dollars a barrel, having touched a session peak of 82.20 dollars, the highest price since November 2014.
The oil price is on course for its fifth consecutive quarterly increase, the longest stretch of gains since early 2007, when a six-quarter run led to a record high of 147.50 dollars a barrel.
U.S. crude futures were up 30 cents at 72.38 dollars a barrel, close to their highest since mid-July.
The United States will target Iran’s oil exports with sanctions from Nov. 4, with Washington applying pressure on governments and companies around the world to fall into line and cut their purchases.
The International Energy Agency forecasts strong oil demand growth of 1.4 million barrels per day (bpd) this year and 1.5 million bpd in 2019, and said in its most recent report that the market was tightening.
U.S. President Donald Trump has demanded that OPEC and Russia increase oil supplies to make up for the expected fall in Iranian exports. Iran is the third-largest producer in OPEC.
OPEC and Russia, however, have so far rebuffed such calls.
The so-called “OPEC+” group, which includes the likes of Russia, Oman and Kazakhstan, met at the weekend to discuss a possible increase in crude output.
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However, the upshot of the gathering was that the group was in no rush to do so.
“After the weekend’s meeting, the voices of those who foresee 100 dollars a barrel and compare the current backdrop to the 2007/2008 bull run are getting louder,” said PVM Oil Associates strategist Tamas Varga.
“Undoubtedly the oil market is expected to be tight in coming months and, if OPEC’s own numbers are to be believed, global oil inventories are to fall during the remainder of the year.”
Richard Robinson, manager of the Ashburton Global Energy Fund, said higher prices are almost certainly on the cards.
“We believe the combination of tight supply, healthy demand, falling global inventories – down from already under-stored levels – and anemic spare capacity helps support an oil price that could end the year above 90 dollars,” he said.