$100 per barrel may be finally knocking on door

Oil exports are down and will probably continue to fall. The tightening US market came ahead of sanctions that Washington plans to implement against Iran’s petroleum exports from early November.

Many analysts expect a drop of more than 1 million bpd of Iranian crude exports, while JP Morgan expects expecting a loss of 1.5 million bpd while economically reeling Venezuela and unstable Libya also present supply risks.

Despite pledges earlier this year to increase production, Saudi Arabia may allow crude prices to rise above $80 per barrel as the market adjusts to the start of US sanctions on Iran.

Saudi energy minister Khalid al-Falih on Sunday rejected accusations by US President Donald Trump that OPEC was keeping oil prices elevated through anti-competitive behavior.

“I do not influence prices,” Saudi Energy Minister Khalid al-Falih told reporters as OPEC and non-OPEC energy ministers gathered in Algiers for a meeting that ended with no formal recommendation for any additional supply boost.

Oil prices rose with Brent crude futures hitting $79.71 per barrel, up by 91 cents, or 1.2 percent. US West Texas Intermediate (WTI) crude futures rose by 75 cents, or 1.1 percent, to $71.53 a barrel.

JP Morgan said in its latest market outlook that “a spike to $90 per barrel is likely” for oil prices in the coming months due to the Iran sanctions.

OPEC has increased production “a good amount” since June, Falih noted, offsetting declines in member countries Iran and Venezuela, as well as non-OPEC Mexico. As a result, “markets are quite balanced today.”

But iran seem have its own agenda that might push the oil market to a cliffhanger.

“Any country that says it can make up for the shortfall in the market is siding with the US,” Bijan Zanganeh, Iran Oil Minister told reporters in Tehran. He said he has written letters to some OPEC and non-OPEC oil ministers expressing his concerns and has complained to the group’s secretary-general about “violations” to the original output-cuts agreement, though he would not elaborate.

“I think Trump made this decision to bring Iran’s exports to zero without any consultation with any experts, not even in his own government,” he said. “He has realized lately that this is not doable. So, they are looking for a symbolic export of zero, if they can, even for just one month.”

FRANK UZUEGBUNAM