Oil reaches the peaks of 2014 with sanctions against Iran and the agreement with NAFTA

NEW YORK (Reuters) – Oil futures jumped more than $ 2 a barrel on Monday, reaching record levels since November 2014, as US sanctions against Iran and a North American trade deal favor the growth.

Brent LCoC1 futures contracts were $ 84.98 per barrel, up $ 2.25 or 2.7%. In post-settlement trade, the contract has continued to strengthen, reaching $ 85.45 per barrel, the first trade exceeding $ 85 since November 2014. US CLc1 light crude futures have risen from $ 2.05 to $ 75.30.

The United States and Canada reached an agreement on Sunday to save the North American Free Trade Agreement (NAFTA), a trilateral pact with Mexico.

Phil Flynn, an analyst at Price Futures Group in Chicago, said the NAFTA deal would boost oil prices because it "increases growth prospects not just for Canada and the United States, but for America." of the North as a whole ".

Investors have accumulated options that give their holders the right to buy Brent at $ 90 at the end of October. The open interest on the $ 90 purchase options has increased by nearly 12,000 lots over the last week to reach 38,000 lots, or 38 million barrels.

Stock market data indicates that the combined net long positions of hedge funds in futures and options on US light crude are at their highest level since the end of July, at around 850 million barrels. [CFTC/] [O/ICE]

Rising oil prices and the strong US dollar could drive demand growth next year, analysts said. For now, the market is focused on US sanctions against Iran, which will come into effect on Nov. 4 and aim to cut crude exports from No. 3 producer of the Organization of Petroleum Exporting Countries.

"Iran has tried to minimize the impact of impending US sanctions by saying it does not intend to reduce its oil production. However, such optimistic claims fall on the ear of a deaf person, "said Stephen Brennock, PVM Oil Associates' strategist.

Several major buyers in India and China have reported that they will reduce their purchases of Iranian oil. Sinopec from China (600028.SS) said it halved Iran's oil loadings in September.

"If Chinese refiners comply with US sanctions more fully than expected, the market equilibrium should tighten even more aggressively," said Edward Bell, an analyst at Emirates NBD.

The President of the United States, Donald Trump, met Saturday with Saudi King Salman on ways to maintain a sufficient supply.

"Even if they (Saudi Arabia) want to comply with President Trump's wishes, what is the reserve capacity of the kingdom?" Said Stephen Innes, head of trading for the Asia-Pacific region at Oanda in Singapore.

With about 1.5 million barrels a day of Iranian oil expected to be taken offline on November 4, prices could "skyrocket with the exorbitant price of $ 100 per barrel, a reasonable target," he said. declared.