Oil prices rise like the Saudis, Russia will not open the faucets

NEW YORK (Reuters) – Brent crude jumped more than 3 percent on Monday to its four-year high above $ 80 after Saudi Arabia and Russia ruled out any increase in production despite calls US President Donald Trump offers global.

The Organization of Petroleum Exporting Countries and non-OPEC countries, including Russia's largest producer, met in Algiers Sunday for a meeting without a formal recommendation to revive Iran's offer.

"The market continues to be concerned about the Iranian and Venezuelan offerings," said Gene McGillian, market research director at Tradition Energy in Stamford. "The inability of producers to deal with this problem this weekend creates a buying opportunity."

Brent crude LCoC1 was $ 2.40 or 3.1% at $ 81.20 per barrel, after peaking at $ 81.39 per day.

(US drilling, production, and storage levels: tmsnrt.rs/2OKP4nJ)

Saudi Arabia, leader of OPEC, and its largest oil-producing ally outside the group, Russia, have actually pushed back Trump's demand for measures to cool the market.

"I do not influence prices," Saudi Energy Minister Khalid al-Falih told reporters on Sunday.

Trump said last week that OPEC "must now lower prices!", But Iranian Oil Minister Bijan Zanganeh said Monday that OPEC has not responded positively to Trump's demands.

"It is becoming increasingly clear that in the face of producers who are reluctant to increase production, the market will face supply shortfalls in the next three to six months, which will have to be solved by rising oil prices." says Harry, the oil strategist of BNP Paribas. Tchilinguirian told Reuters Global Oil Forum.

Commodity traders Trafigura and Mercuria have said Brent could reach $ 90 a barrel by the end of the year and $ 100 by early 2019, with markets tightening once US sanctions against Iran go ahead. fully implemented from November.

JPMorgan said the US sanctions against Iran could result in a loss of 1.5 million barrels a day, while Mercuria warned that up to 2 million barrels a day could be eliminated from the market.

Concerns about production deficits are encouraging traders to place longer bets, which is boosting Brent prices, said Brian LaRose, a technical analyst at United-ICAP.

"It's the seventh time in the last two months that we've challenged the highs," he said, referring to individual monthly contracts, rather than a continuation contract. If Brent prices exceeded $ 82 a barrel, he said prices up to $ 90 would be a short-term opportunity.

Some said the easing of demand for trade tensions between the United States and China offsets the loss of Iran's supply, but McGillian said that if trade tensions did not show Chinese demand, oil prices increase.

US commercial crude oil inventories C-STK-T-EIA are at their lowest level since early 2015. While US oil production C-OUT-T-EIA is close to the record 11 million bpd, drilling results Americans tend to slow down production.