Brent oil maintains firm tone on Tuesday and hit new four-year high at $82.18, in extension of strong rally on Monday.
Oil prices could rise towards $100 per barrel towards the end of the year or by early 2019 as sanctions against Iran bite, commodity merchants Trafigura and Mercuria said on Monday at the Asia Pacific Petroleum Conference (APPEC) in Singapore.
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While the opposition parties have blamed the government for the rise in prices, the Centre has reiterated its stand that prices in India are a function of global crude oil moves.
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 USA sanctions against Iran are fully implemented from November.
4 will target Iran's oil exports with sanctions, and Washington is putting pressure on governments and companies around the world to fall in line and cut purchases from Tehran.
Iran says no country can ever compensate for its missing oil supplies to markets in case the US materializes its threat to bring the Islamic Republic's oil exports to zero with a top official saying that US President Donald Trump would sooner or later have a change of heart over his campaign to the same effect.
"Balances are precarious and the lack of spare capacity could see crude pricing well above US$90 or even US$100, should all of the potential risk in the market materialize", analysts including Ed Morse said in the note. Supplies are also forecast to grow from other producers outside the bloc including Canada, Kazakhstan and Brazil, which will collectively add another 2.6 MMbpd to markets by 2023.
Trump first blamed OPEC for rising oil prices in April.
He further said all producers - OPEC and non-OPEC - wanted to keep the price of oil at around $80 per barrel.
Last year, Opec and other oil-producing nations including Russian Federation said they would extend a deal, first agreed in 2016, to cut production to help support oil prices after they fell below $50 a barrel.
"The OPEC and the Middle Eastern producers' actual crude production capability is up ... but it's the disruption in supply and exports [such as the economic sanctions on Iran and Venezuelan economic turmoil] that's supporting the oil prices", said Chris Midgely, global director of analytics at Platts. This deal was upheld at Sunday's meeting.
Zanganeh was referring to a tweet by Trump in which he linked US support for Middle Eastern countries to oil prices on Thursday and again urged OPEC to lower prices.
Looking ahead, crude oil prices await the release of US Energy Information Administration and Department of Energy inventory figures later this week.
"While investments picked up slightly in 2017 compared to the previous two years, and the expectations are for higher levels again in 2018, it is vital that as an industry we ensure there is timely and adequate investment so as not to lead to a supply shortage in the future", OPEC Secretary-General Mohammad Barkindo said.