Brent oil reaches its highest level in four years before sanctions imposed by Iran, traders are considering more hike

SINGAPORE (Reuters) – Brent crude prices reached their highest level on Monday since November 2014, ahead of US sanctions against Iran, the third largest producer in the Organization of the Petroleum Exporting Countries (OPEC), which will be launched on Monday. next.

Benchmark Brent LCoC1 crude oil futures prices reached $ 83.27 per barrel and were $ 83.21 to 0339, up 48 cents or 0.6% from their closing. .

West Texas Intermediate (WTI) futures were up 32 cents, or 0.4%, to $ 73.57 per barrel.

WTI prices were supported Friday by a stagnant report in the US, which indicates a slowdown in US crude output C-OUT-T-EIA, which now rivals the major Russian and Saudi producers.

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

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

A sign that the financial market is positioning itself for further price increases, hedge funds have increased their upward bets on US crude over the week to September 25, according to data from the Commodity Futures Trading Commission (CFTC). option positions in New York and London by 3,728 contracts to reach 346,566 during the period.

An additional sign of the impact that US sanctions on Iran will have on the market, Chinese company Sinopec (600028.SS) said it halved Iranian oil shipments this month. China is the biggest buyer of Iranian oil.

"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 "Crude oil production in the United States, number of rigs", 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 decreased in the last quarter, reaching their lowest level in nearly a year, as firms felt the effects of rising raw material costs and deteriorating market conditions. International trade.

(For a chart on 'Oil prices in different currencies', click on tmsnrt.rs/2OffFwp)