Oil goes up to $ 80 in London for the first time since 2014

Oil goes up to $ 80 in London for the first time since 2014

Bloomberg. Oil reached US $ 80 a barrel in London for the first time since 2014 due to the decrease in US crude inventories and the anticipation of the impact of new sanctions against OPEC member Iran.

Oil exploration in Baku, Azerbaijan. Bloomberg
Oil reached US $ 80 a barrel in London for the first time since 2014 due to the decrease in US crude inventories and the anticipation of the impact of new sanctions against OPEC member Iran.
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Brent futures rose 1.1% to US $ 80.18 on Thursday. US reserves fell for the second week as the summer season of increased car use approached, government data showed on Wednesday. Goldman Sachs Group Inc. said that the growing production of unconventional crude from the United States could not replace the possible drop in oil shipments following the imposition of US sanctions on the third largest producer of OPEC.
Oil has rallied to the highest level this month in more than three years after US President Donald Trump withdrew from a pact between Iran and the world powers that eased sanctions on the Islamic Republic in exchange for restrictions on its nuclear program. The International Energy Agency said that global oversupply has been eliminated thanks to OPEC production cuts and warned that high prices could hurt consumption and reduce forecasts of growth in demand.
“Supply concerns are the most important thing after the United States abandoned the nuclear agreement with Iran,” said Norbert Ruecker, director of macro and commodities research at Julius Baer Group Ltd. in Zurich. “The geopolitical noise and the fears of an escalation are here to stay.”
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Brent for July delivery rose 66 cents to US $ 79.94 a barrel on London’s ICE Futures Europe stock exchange at 10:49 am local time, after adding up 1.1% to US $ 80.18 on Wednesday. The world reference crude is trading at a premium of US $ 7.66 compared to the WTI for July.
The West Texas Intermediate for June delivery was trading at US $ 72.13 a barrel on the New York Mercantile Exchange, up 64 cents. The contract rose 18 cents, or 0.3%, to US $ 71.49 on Wednesday. The total negotiated volume was 33% higher than the average of 100 days.
Futures for September delivery on the Shanghai International Energy Exchange rose 1.9% to 481.9 yuan a barrel, up for the third day in a row.
Crude inventories in the United States fell 1.4 million barrels last week, while domestic production rose to 10.7 million barrels a day, the Energy Information Administration reported Wednesday. The threat of an increase in US production, which has surpassed 10 million barrels per day every week since the beginning of February, continues to limit prices and undermine OPEC production cuts. Gasoline stocks also decreased last week by 3.79 million barrels, the EIA reported.
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Members of the Organization of the Petroleum Exporting Countries, including Saudi Arabia, Kuwait and the United Arab Emirates, said they have sufficient capacity to cover any supply shortfall if new sanctions curb Iran’s exports. Even so, Goldman Sachs said the group will not proactively replace the lost barrels, given the current narrative that the market is not completely balanced.

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