Oil hits four-year peak ahead of sanctions on Iran

Oil hits four-year peak ahead of sanctions on Iran

Despite newswires showing that OPEC oil production in September rose over 90k, oil prices continued to surge amid reports that Iranian oil exports had dropped to a 2.5yr low at 1.72mln.

Saudi Arabia has been unable to offset the lost Iranian crude exports. That's the highest level since November 2014.

"Crude prices continued their meteoric rise as Canada and (the) USA updated the NAFTA treaty, which would augur well for economic growth", said Sukrit Vijayakar, director of energy consultancy Trifecta.

"We defend many of these nations for nothing, and then they take advantage of us by giving us high oil prices".

"There is concern in the market that the loss of barrels from Iran and Venezuela is not going to be made up for through extra supplies from particularly Saudi Arabia and Russian Federation", said Gene McGillian, manager of market research at Tradition Energy. "At the same time, the U.S. -Mexico-Canada Agreement is also improving the overall sentiment for oil".

The average cost of gasoline in the United States has risen 60 percent from $1.87 per gallon in February 2016 to nearly $3 in September. Meanwhile, BP Plc and Total SA cautioned that such a rally would hurt demand, especially as U.S. -China trade row persists.

West Texas Intermediate for November delivery rose 4 cents to $75.34 a barrel on the New York Mercantile Exchange at 10:27 a.m.in London. The contract climbed $1.13, or 1.6 percent, on Friday. Total volume traded was about 52% below the 100-day average.

Brent crude oil futures LCOc1 were trading at $83.04 per barrel at 0057 GMT, up 31 cents, or 0.4 percent, from their last close and near the $83.07 level reached during the last session - the highest since November 2014. Open interest in call options at US$90 has risen by almost 12,000 lots in the past week to 38,000 lots, or 38 million barrels. The global benchmark crude traded at a $9.68 premium to WTI for the same month. Elsewhere, exports look set to continue its plunge with China's top refiner, Sinopec, looking to halve its oil imports from Iran to around 130k bpd. That's the lowest since February 2016.

Brent oil price climbed to a four-year high ahead of U.S. sanctions against major producer Iran.

The two leaders also discussed developments in the region and the world.

The US is rapidly increasing its production. The oil market will also be waiting for any signals from Khalid Al-Falih, the Saudi energy minister, who's due to speak in events in Morocco and Russian Federation on Monday and Thursday respectively. Meanwhile, Brent oil price for December delivery climbed up 2.25 US dollars to 84.98 USA dollars per barrel. All comments are subject to editorial review.

With assistance from Stephen Stapczynski.

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