Signals from oil cartel Opec that there would not be any immediate increase in production and a general tightening of the oil market resulted in the price of Brent crude reaching a high since November 2014 at $80 a barrel on Monday.
There were some enthusiastic investors and traders predicting crude prices crossing the $100 a barrel mark even there was a rise of 2.7 per cent in oil futures in London.
The latest market outlook of J.P. Morgan predicted "a spike to $90 per barrel is likely" in the forthcoming months driven primarily by the economic sanctions to be imposed on Iran by the United States from November this year which is expected to reduce Iranian oil exports. As it is, there has already been a drastic fall in demand for Iranian oil because importers are already getting ready for the sanctions by the US. The bank further predicts that an average of $85 and $76 per barrel in the prices of Brent and U.S. WTI benchmark respectively for the next six months.
The 15 nation oil cartel Opec decided not to increase output to shore up global crude prices more after a meeting of oil ministers of Opec and non-Opec countries. This despite a direct demand from United States president Donald Trump to the Opec that it should increase production of crude immediately so that the increasing prices of crude can be brought down. Trump had said that the countries in the Middle East that cannot survive without help from the US is going against the US. The oil ministers have however decided that unless there is a demand for more oil from customers, no increase of crude production would be done.
On Monday, the global benchmark Brent crude passed the psychological $80 a barrel mark as a result of a rally in the stocks over the last five weeks.
Stephen Brennock, oil analyst at PVM Oil Associates in London that the multiyear high for Brent that was reached on was not a surprise because it was expected.
"Price risks remain skewed to the upside in the run-up to looming US elections on Iranian oil exports. This outlook has been cemented by inaction on the part of OPEC+ over the weekend, which has in effect green-lighted a forthcoming supply squeeze," he said in a television interview.
While the analysts are predicting that this upward trend in demand and price of global crude would continue till about the end of the current year, things would be different next year.
"The oil balance in the early part of 2019 makes very bad reading for oil bulls with a sizable supply surplus penciled in by the leading energy agencies," he said. "This will inevitably take the steam out of the current upswing in oil prices."
(Source:www.cnbc.com)
There were some enthusiastic investors and traders predicting crude prices crossing the $100 a barrel mark even there was a rise of 2.7 per cent in oil futures in London.
The latest market outlook of J.P. Morgan predicted "a spike to $90 per barrel is likely" in the forthcoming months driven primarily by the economic sanctions to be imposed on Iran by the United States from November this year which is expected to reduce Iranian oil exports. As it is, there has already been a drastic fall in demand for Iranian oil because importers are already getting ready for the sanctions by the US. The bank further predicts that an average of $85 and $76 per barrel in the prices of Brent and U.S. WTI benchmark respectively for the next six months.
The 15 nation oil cartel Opec decided not to increase output to shore up global crude prices more after a meeting of oil ministers of Opec and non-Opec countries. This despite a direct demand from United States president Donald Trump to the Opec that it should increase production of crude immediately so that the increasing prices of crude can be brought down. Trump had said that the countries in the Middle East that cannot survive without help from the US is going against the US. The oil ministers have however decided that unless there is a demand for more oil from customers, no increase of crude production would be done.
On Monday, the global benchmark Brent crude passed the psychological $80 a barrel mark as a result of a rally in the stocks over the last five weeks.
Stephen Brennock, oil analyst at PVM Oil Associates in London that the multiyear high for Brent that was reached on was not a surprise because it was expected.
"Price risks remain skewed to the upside in the run-up to looming US elections on Iranian oil exports. This outlook has been cemented by inaction on the part of OPEC+ over the weekend, which has in effect green-lighted a forthcoming supply squeeze," he said in a television interview.
While the analysts are predicting that this upward trend in demand and price of global crude would continue till about the end of the current year, things would be different next year.
"The oil balance in the early part of 2019 makes very bad reading for oil bulls with a sizable supply surplus penciled in by the leading energy agencies," he said. "This will inevitably take the steam out of the current upswing in oil prices."
(Source:www.cnbc.com)
