Brent reaches its highest level in four years as US sanctions against Iran strengthen supply

NEW YORK (Reuters) – Oil prices climbed more than 1 percent on Friday as Brent reached its highest level in four years, as US sanctions on Tehran reduced Iran's exports.

LCOc1 futures on Brent rose $ 1 to $ 82.72 per barrel. The session record of $ 82.87 was the highest contract since November 10, 2014. In the third quarter, Brent gained about 4%.

United States CL3 (WTI) (West Texas Intermediate) futures futures advanced $ 1.13 to $ 73.25 per barrel. The highest of the session, $ 73.73, is the highest since July 11th. The contract is up about 5% this month, but down about 1% for the quarter.

A new round of US sanctions on Iran, the third largest producer in the Organization of the Petroleum Exporting Countries (OPEC), comes on the scene on 4 November.

"The shock potential of supply due to lower oil production in Iran and Venezuela will remain bullish on oil prices, and the second round of US sanctions against Iran in November will support this. feeling, "said Abhishek Kumar, energy analyst at Interfax Energy. in London.

In the United States, hedge funds increased their combined futures and options position in New York and London from 3,728 contracts to 346,566 in the week to September 25, US Commodity Futures reported. Trading Commission.

Washington is asking Iranian oil buyers to zero oil imports in order to force Tehran to negotiate a new nuclear deal and limit its influence in the Middle East.

China's Sinopec Corp halves Iran's crude oil loadings this month, as the state refiner is under intense pressure from Washington, say people familiar with the issue.

However, India, another leading buyer, has pledged to buy oil in Tehran, the Iranian foreign minister said.

Other OPEC countries have boosted production, but global stocks continue to decline, analysts said.

Saudi Arabia is expected to add oil to the market to offset the decline in Iranian production. Two sources close to the OPEC policy told Reuters that Saudi Arabia and other OPEC producers and non-OPEC countries had discussed A possible increase in production of about 500,000 barrels a day.

However, ANZ indicated in a note that the major suppliers were not able to offset the losses resulting from the sanctions, estimated at 1.5 million b / d.

At its peak in 2018 in May, Iran exported 2.71 million b / d, nearly 3% of daily crude oil consumption.

In 2019, Saudi Arabia fears that rising shale production in the United States will create a new glut, especially if a stronger dollar and weaker emerging economies reduce global oil demand.

Crude oil production in the United States rose 269,000 barrels a day to a record 10.964 million barrels per day in July, the US Administration said in a monthly report.

However, drillers cut three oil rigs during the week before September 28, General Electric Co's (GE.N) Energy services firm Baker Hughes said Friday. New drilling stagnated in the third quarter, with the smallest additions in a quarter since 2017 due to pipeline constraints in the country's largest oil field.

The Permian Basin is expected to produce 3.5 million barrels a day in October, just below Iran's third-largest producer, OPEC.