Oil tops $80 for first time since 2014 amid Iran export fears

Oil tops $80 for first time since 2014 amid Iran export fears

Oil tops $80 for first time since 2014 amid Iran export fears

Brent broke through $80 for the first time since November 2014 on Thursday.

This week's API report seems to have served as a wake-up call for traders after lots of upbeat media reports about strong crude oil demand, helped by EIA's latest drilling productivity report, which estimated that shale oil production in the Lower 48 would jump by a record 144,000 bpd this month, to 7.178 million bpd. As a result of se increases gasoline and diesel have exceeded price barrier of 1.3 and 1.2 euros per liter, which implies new Maxima.

Brent crude futures were at $79.57 per barrel at 0310 GMT, up 27 cents, or 0.3 percent from their last close. According to the analysts' estimates, global crude oil output would need to grow by 5.7 million barrels a day by 2020 to meet the surge in demand for distillates. Thus, this Thursday has reached 72.30 dollars per barrel, its maximum amount since November 2017. Thus, fear of investors to reduce supply drives amount upward.

Spot crude oil cargo prices are at their steepest discounts to futures prices in years as sellers struggle to find buyers for West African, Russian and Kazakh cargoes, while pipeline bottlenecks trap supply in West Texas and Canada.

The bloc that also comprises Armenia, Belarus, Kazakhstan and Kyrgyzstan, also plans to begin three years of talks with Iran that aim to create a free trade zone. For its part, Diesel has marked a new annual maximum and levels that were not seen since December 2014 to be in 1.207 euros, a rise of 1.42%, according to data from European Union oil bulletin.

OPEC kingpin Saudi Arabia said on Thursday it would make sure the world is adequately supplied with oil just as major consumer India expressed frustration with rising prices.

Beyond the typical discussions revolving the tanker market and possible influences these geopolitical developments may have on their trade (something that has been extensively discussed in previous issues), it is important to look at the overall effect it has on the shipping industry as a whole.

France's Total on Wednesday warned it might abandon a multi-billion-dollar gas project in Iran if it could not secure a waiver from United States sanctions, casting further doubt on European-led efforts to salvage the nuclear deal.

Some analysts said sanctions could wipe 1 million barrels per day of Iranian crude off the market, while others said the impact would be limited to fewer than 500,000 barrels a day.

Front-month Brent prices are now nearly $1.80 per barrel more expensive than those for delivery in December.

The International Energy Agency said that U.S. stocks of crude oil shrank 1.4 million barrels.

But high oil prices could hit consumption, the International Energy Agency warned on Wednesday, lowering its global oil demand growth forecast for 2018 to 1.4 million from 1.5 million barrels per day (bpd). "Among those risks, Iran continues to top the list, with questions remaining around the extent to which a return of US sanctions will limit Iranian oil production".

On Wednesday, the EIA reported that USA crude inventories fell 1.4 million barrels last week, while domestic production rose to 10.7 million barrels a day.

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