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LONDON (Reuters) – Crude oil futures rose on Monday as geopolitical tensions over the disappearance of a well-known Saudi journalist raised concerns over supply, although worries about Long-term demand prospects weighed on prices.
FILE PHOTO – A Chinese man is working on a pump in the PetroChina oil field in Daqing, Heilongjiang Province, northeast China, on March 18, 2006.
The benchmark Brent index jumped from $ 1.49 a barrel to a high of $ 81.92 before dropping to $ 80.83, up 40 cents at 7:45 am GMT. US crude rose 20 cents to 71.54 dollars.
"Increasing tensions over the disappearance of journalist Jamal Khashoggi at the Saudi Arabian consulate in Istanbul have had a favorable effect on oil prices," said Warren Patterson, ING's commodities strategist.
Saudi Arabia has been under pressure since Khashoggi, a Riyadh critic and US resident, disappeared on October 2 after visiting Saudi Arabia's consulate in Istanbul.
US President Donald Trump threatened to "severely punish" if it was discovered that Khashoggi had been killed at the consulate.
The kingdom said it would avenge any action brought against it in the Khashoggi case, the official SPA news agency reported on Sunday, citing an official source.
"This raised fears that the Saudis could use oil as a tool of retaliation if sanctions or other measures are taken against it," Patterson said.
In its monthly report released Friday by the International Energy Agency, the Western Energy Monitoring Board, the market appeared "sufficiently supplied for the moment" and reduced its demand growth forecasts. this year and next year.
The OPEC, Russia and other oil producers, such as American shale companies, have sharply increased their production since May, added the IEA, increasing global crude production by 1 percent. , 4 million barrels a day.
"I have just looked at the IEA figures in detail and these are very bearish for oil prices," said Carsten Fritsch, commodities analyst for Commerzbank.
The IEA report was released after the secretary-general of the Organization of Petroleum Exporting Countries said the group saw the oil market as well supplied and that he feared creating a overabundance next year.
Societe Generale on Monday raised its forecast for the barrel of Brent for the last quarter of the year to 82 dollars a barrel, against 78 dollars before, after a sharp rise in prices in the last two months.
The French bank wrote that there was "a high level of risk and uncertainty in the oil markets".
Report by Christopher Johnson in London and Meng Meng and Aizhu Chen at BEIJING; Edited by David Goodman
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