Wednesday, April 24, 2019
Home Business Oil companies such as OPEC, Russia are resisting demands to increase production...

Oil companies such as OPEC, Russia are resisting demands to increase production as Iran sanctions threaten

SINGAPORE (Reuters) – Oil markets remained strong on Tuesday, with Brent crude near four-year high reaching its previous session.

FILE PHOTO: A worker walks on the Zubair oil field in Basra, Iraq May 9, 2018. REUTERS / Essam al-Sudani

The oil markets have been driven by the impending US sanctions on Iran and the unwillingness or inability of the Middle East-dominated producer cartel OPEC and Russia to increase production.

Brent Crude Futures LCOc1 was $ 81.32 per barrel at 0209 GMT, up 12 cents or 0.2 percent, and not far from the $ 81.48 a barrel the previous day, its highest level since November 2014.

West Texas Intermediate (WTI) CLc1 crude oil futures were $ 72.10 a barrel, 2 cents above their last settlement.

The United States will begin sanctions on Iran's oil exports from November, and Washington is pressuring governments and companies worldwide to adapt to Tehran.

"Iran will lose considerable export volumes, and given the restraint of OPEC +, the market will be ill-equipped to fill the supply gap," said Harry Tchilinguirian, Global Head of Commodity Markets Strategy at French bank BNP Paribas to Reuters Global Oil Forum Tuesday. OPEC + includes Russia.

(For a graphic to & Brent Crude Price History & # 39 ;, click on

US President Donald Trump has demanded that the Organization of Petroleum Exporting Countries (OPEC), of which Iran is a member, and Russia increase their supplies to offset the expected decline in Iranian exports.

However, OPEC and Russia have so far rejected such calls.

A formal decision on producer group oil production will not take place until the December meeting, unless an extraordinary meeting is held, so the windows of opportunity in which oil prices can potentially increase profits are quite large, as Iran loses exports and OPEC + remains in standby mode, "Tchilinguirian said.

Ashley Kelty, analyst for oil and gas research at financial services firm Cantor Fitzgerald, said oil prices could soon reach $ 90 a barrel.

"We do not believe that OPEC can significantly increase production in the near future, as the physical reserve capacity in the system is not that high," Kelty said.

Bank of America Merrill Lynch said it raised its Brent crude oil price forecast for 2019 from $ 75 a barrel to $ 80 a barrel, while increasing its $ 201 WTI crude oil forecast in 2019 to $ 71 a barrel.

The US bank said, "The Iran factor could dominate the market in the near term and cause a rise in (crude oil) prices, though he added that concerns about emerging market demand could thereafter recur."

Indian refineries – fighting high crude oil prices and a moving rupee – plan to reduce oil imports, which may be a first sign that high prices are beginning to weigh on demand.

Reporting by Henning Gloystein; Editing by Richard Pullin

Our standards:The Thomson Reuters Trust Principles.



Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Must Read

Japan releases an epic video of the seconds before its spaceship bombards an asteroid

We now know what it looks like when a spaceship bombards an asteroid with a bomb.In early April, the Japan Aerospace Exploration Agency (JAXA)...

At least 156 people in 10 states became infected with E. coli related to ground beef, says CDC

ATLANTA - Investigators believe beef may be responsible for 156 people in 10 states that have signed up with E. coli since March 1,...

Leaked press photos of the huge Samsung revelation Galaxy View 2

Samsung's SamMobile website on Monday captured images of what it said was the second generation of the Korean company Galaxy View, which launched...

What is the ideal breakfast for a child? – The Parisian

What is the ideal breakfast for a child? The ParisianChildren who go to school hungry will receive a snack in September. A necessity at...

Mercato | Mercato – PSG: A colossal number 9 could land this summer!

Mercato - PSG: Is Mauro Icardi the ideal successor of Edinson Cavani? ...