Brent crude oil reaches its highest level in four years before sanctions imposed by Iran

SINGAPORE (Reuters) – Crude oil prices hit their highest level since November 2014, ahead of US sanctions against Iran that began next month.

Brent LCoC1 crude oil futures traded at $ 83.24 per barrel at 0228 GMT, up 51 cents or 0.3%, the highest level since November 2014.

West Texas Intermediate (WTI) CLc1 futures were up 37 cents, or 0.5%, to $ 73.62 per barrel. WTI prices were supported by a number of stagnant drilling rigs, which portends a slowdown in US crude oil production C-OUT-T-EIA.

Brent has been pushed up by the imminent sanctions against Iran, which will begin targeting its oil sector from Nov. 4.

ANZ Bank said on Monday that "the market was banking on oil prices at $ 100 per barrel".

There had been expectations that China would ignore US sanctions. However, China Sinopec (600028.SS) halves Iranian crude loadings this month, a sign that Washington's pressures are having an effect.

"If Chinese refiners comply with US sanctions more fully than expected, the market equilibrium should tighten even more aggressively," wrote Edward Bell, commodity analyst at Emirates Bank NBD in a note published on Sunday.

US President Donald Trump on Saturday called on Saudi King Salman to discuss ways to maintain an adequate supply once Iranian exports are hit by sanctions.

"Until OPEC offers a huge offer, traders will continue to push even harder," said Stephen Innes, head of Asia Pacific transactions at Oanda in Singapore.

"Even if they (Saudi Arabia) wanted to bow to President Trump's wishes, how much spare capacity does the Kingdom have?" Asked Innes.

"We will find out very soon that about 1.5 million barrels (per day) of Iranian oil will be offline on November 4th. If the market estimates that Saudi Arabia's capacity is operating at 10.5 million barrels a day … oil Prices will skyrocket with the spark of $ 100 a barrel, making it a goal reasonable, "said Innes.

(For a chart on "US Crude Oil Production, Number of Drills", click on reut.rs/2IrBi7E)

Slowing down?

With soaring oil prices, their inflationary effect on demand growth is causing concern, particularly in Asian emerging markets, where weakened currencies are still adding to the high costs of fuel imports.

Add to that the trade disputes between the United States and other major powers, especially China, and economic growth to 2019 could be eroded.

The growth of the Chinese manufacturing sector was already shaken in September by the weakening of foreign and domestic demand, revealed two surveys Sunday.

In Japan, the confidence of major manufacturers deteriorated in the last quarter to reach its lowest level in nearly a year, as companies felt the effects of rising raw material costs and the price of raw materials. deterioration of global trade conditions.

(For a graph on "Gross Brent in Different Currencies", click on tmsnrt.rs/2N67zl9)