Oil nears $80 after hitting highest since November 2014
Oil prices hit their highest level since November 2014 on Thursday, with Brent crude creeping closer to $80 per barrel as supplies tighten and tensions with Iran simmer.
U.S. West Texas Intermediate (WTI) crude futures were up 29 cents at $71.78 a barrel. That was not far off Tuesday’s $71.92 a barrel – also a level not seen since November 2014.
The prospects of a sharp drop in Iranian oil exports in the coming months due to renewed U.S. sanctions following President Donald Trump’s decision to withdraw from an international nuclear deal with Tehran has lifted oil prices in recent weeks.
France’s Total on Wednesday warned it might abandon a multi-billion-dollar gas project in Iran if it could not secure a waiver from U.S. sanctions, casting further doubt on European-led efforts to salvage the nuclear deal.
“The geo-political noise and escalation fears are here to stay,” said Norbert Rücker, Head of Macro & Commodity Research, at Swiss bank Julius Baer. “Supply concerns are top of mind after the United States left the Iran nuclear deal.”
Global inventories of and refined products dropped sharply in recent months due to robust demand and production cuts by the world’s top producing countries.
Oil stocks were expected to drop further as peak summer driving season nears, offsetting increases in U.S. shale output, said analysts at Bernstein.