Oil jumps 2 percent as market tightens, more gains seen

LONDON (Reuters) – Oil prices rose more than 2 percent on Monday as U.S. sanctions restricted Iranian crude exports, tightening global supply, with some traders forecasting a spike in crude to as much as $100 per barrel. Brent crude LCOc1 hit its highest since May at $80.62 per barrel, up $1.82 or 2.3 percent, by 0830 GMT. U.S. light crude CLc1 was $1.35 higher at $72.13. U.S. commercial crude oil inventories C-STK-T-EIA are at their lowest since early 2015 and although U.S. oil production C-OUT-T-EIA is near a record high of 11 million barrels per day (bpd), subdued U.S. drilling activity points towards a slowdown in output. (For a graphic on ‘U.S. oil drilling, production & storage levels’ click tmsnrt.rs/2OKP4nJ) Commodity traders Trafigura and Mercuria said on Monday that Brent could rise to $90 per barrel by Christmas and pass $100 in early 2019, as markets tighten once U.S. sanctions against Iran are fully implemented from November. J.P. Morgan says U.S. sanctions on Iran could lead to a loss of 1.5 million bpd, while Mercuria warned that as much as 2 million bpd could be knocked out of the market. The Middle East dominated Organization of the Petroleum Exporting Countries as… continue reading

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