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Oil prices rose on Monday as U.S. markets tightened just weeks ahead of Washington’s plan to impose new sanctions against Iran, with major traders and banks expecting prices to rise over $90 per barrel in coming months.
Brent oil soared Monday close to $81, reaching the highest level since November 2014 after OPEC and other global producers snubbed pressure from US President Donald Trump to lower prices.
At 0840 GMT (9:40am Nigerian time), Brent North Sea crude for delivery in November soared as high as $80.94 per barrel.
U.S. West Texas Intermediate (WTI) crude futures CLc1 rose by 82 cents, or 1.2 percent, to $71.60 a barrel.
Amid a tightening market, U.S. commercial crude oil inventories C-STK-T-EIA are at their lowest level since early 2015. And while output C-OUT-T-EIA remains around the record of 11 million barrels per day (bpd), recent subdued U.S. drilling activity points towards a slowdown. Commodity merchants Trafigura and Mercuria said on Monday that Brent could rise to $90 per barrel by Christmas and even above $100 in early 2019 as markets tighten once U.S. sanctions against Iran are implemented from November. J.P. Morgan expects the sanctions could lead to a loss of 1.5 million bpd, while Mercuria warned that as much as 2 million bpd could be knocked out of the market.
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