Home / Energy/ Oil tops $75, highest since 2014 OPEC meeting that led to pump war

Oil tops $75, highest since 2014 OPEC meeting that led to pump war


Comments / {{hitsCtrl.values.hits}} Views / Wednesday, 25 April 2018 00:00


LONDON  (Reuters) - Oil rose on Tuesday above $75 a barrel to its highest since November 2014, supported by OPEC-led production cuts, strong demand and the prospect of renewed U.S. sanctions on Iran.

Brent crude, the global benchmark, hit its highest since OPEC on Nov. 27, 2014 turned its back on curbing output to support prices, a move that triggered a battle for market share and helped deepen a collapse to $27 in early 2016.

Oil prices began to recover in 2016 as the Organization of the Petroleum Exporting Countries discussed a return to market management with the help of Russia and other non-members. A supply-cutting deal took effect in January 2017.

Brent traded as high as $75.27, gaining for a sixth day, and was up 37 cents at $75.08 by 0845 GMT. U.S. crude rose 51 cents to $69.15, having hit its highest since Nov. 28, 2014 on Thursday.

The United States has until May 12 to decide whether to quit a nuclear deal with Iran and reimpose sanctions against OPEC’s third-largest producer, tightening global supplies.

“Currently, all bets are off on the U.S. staying in the nuclear agreement,” said Tamas Varga of oil broker PVM, who added this concern was the most significant element of Brent’s recent rally.

Stephen Innes, head of trading for Asia-Pacific at futures brokerage OANDA, said new sanctions against Tehran “could push oil prices up as much as $5 per barrel”.

OPEC’s supply curtailments and the threat of new sanctions are occurring just as demand in Asia, the biggest oil-consuming region, has risen to a record as new and expanded refineries start up from China to Vietnam. The supply cut has virtually achieved its stated goal of reducing inventories in developed economies to their five-year average, but OPEC has shown little sign yet of wanting to wind down the deal.

The latest U.S. inventory figures are expected to show a 2.6-million-barrel drop in crude stocks.

The American Petroleum Institute, an industry group, releases its data for last week at 4:30 p.m. EDT (2030 GMT) on Tuesday, a day before the government’s supply report.

One of the factors limiting the oil rally is rising U.S. production. U.S. output, supported by high prices, has hit record levels, partially offsetting the OPEC-led cuts.

 


Share This Article


DISCLAIMER:

1. All comments will be moderated by the Daily FT Web Editor.

2. Comments that are abusive, obscene, incendiary, defamatory or irrelevant will not be published.

3. We may remove hyperlinks within comments.

4. Kindly use a genuine email ID and provide your name.

5. Spamming the comments section under different user names may result in being blacklisted.

COMMENTS

Today's Columnists

Craving a world with free migration of Homo sapiens

Monday, 18 June 2018

During the discussion time following the presentation of a paper by former diplomat Tamara Kunanayakam on the invasion of Sri Lanka’s economic policymaking by neoliberal economic thinkers two weeks ago, Colombo University’s economics don Lalithas


Sigmoid Curve and Sri Lanka: Significant signals

Monday, 18 June 2018

Sri Lanka, often named as the ‘Wonder of Asia,’ has many citizens wondering what is going on.


Refuse and recuse in Cloud-Cuckoo-Land

Friday, 15 June 2018

I had a dream. That there were monsters ruling the land in the disguise of being military champions. But then some knights in slightly tarnished armour rode to the nation’s defence and liberated us from our saviours. And all was well again. At leas


Floods, drought and disasters

Thursday, 14 June 2018

The Yahapalana Government has been singularly unfortunate in having to face many natural and manmade disasters during their regime.Almost every year many citizens have to undergo the consequences of floods in certain parts of the country whereas ther


Columnists More