Brent Oil Prices hit $80

Oil hits high

Oil hits high

U.S. Brent is within striking distance of the psychological $80.00 level, a price not traded since November 2014. It stood at $79.39 as of 8:20 pm Nigerian time.

Oil and gas research analyst Jack Allardyce at cantor Fitzgerald Europe said: "There is now a firmer consensus around the potential impact of lost Venezuelan/Iranian exports, and as such, we see little to drive benchmarks much higher in the immediate term".

The 50 percent rise in oil prices in the past year is encouraging major companies such as ExxonMobil (XOM.N), Royal Dutch Shell (RDSa.L), Chevron (CVX.N), BP (BP.L) and Total (TOTF.PA) to increase output.

Total warned on Wednesday it might have to abandon a multi-billion gas project on Iran if USA sanctions go ahead. On the New York Mercantile Exchange, June West Texas Intermediate crude CLM8, -0.43% the US benchmark, were up 37 cents, or 0.5%, at $71.86 a barrel, on track to notch another 3½-year peak. Global oil supplies could be hit by President Donald Trump's decision to pull the U.S. out of the Iran nuclear deal, and also by falling production in crisis-hit Venezuela, the International Energy Agency said yesterday.

"The geopolitical noise and escalation fears are here to stay".

Separately, Al-Falih and United Arab Emirates Energy Minister Suhail Al Mazrouei said recent moves in oil prices have been driven by geopolitics and that global supply remains ample, according to a statement released by the Saudi energy ministry.

Prior to Thursday's oil-price rally, crude futures had already been rising strongly thanks to steady demand growth and a landmark deal by oil producing countries, both inside and outside the OPEC cartel, to lower output.

He's referring to the fact that first-quarter production levels for various producers outside the U.S., and globally, fell short of forecasts made by the International Energy Agency.

The downward trend was supported by data released late Tuesday by the American Petroleum Institute showing USA crude oil inventories increased last week by 4.8 million barrels.

Crude prices have received broad support from voluntary supply cuts led by the Organisation of the Petroleum Exporting Countries (OPEC) aimed at tightening the market.

Leading production increases is the United States, where crude output has soared by 27 percent in the last two years, to a record 10.72 million bpd, putting the United States within reach of top producer Russia's 11 million bpd. This makes sense since the USA sanctions against Iraq are likely to lead to some supply disruption although we may not see the full impact of the supply reductions until November.

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