Oil price edges closer to $80 per barrel


Oil price edges closer to $80 per barrel

US bank Goldman Sachs said consumption would cross 100 million bpd during the peak summer period.

"Given the uncertainty over trade, Iranian sanctions and various other geopolitical hot spots, people are making a bet that USA growth will outperform the rest of the world and that these companies will be less affected", he said.

Fuel prices continue as well with rise that began at end of March and is now intensified by political tensions that have led to skyrocketing oil price. "It would be extraordinary if such a large jump did not affect demand growth, especially as end-user subsidies have been reduced or cut in several emerging economies in recent years".

"It is too soon to say what will happen this time, but we should examine whether other producers could step in to ensure an orderly flow of oil to the market and offset a disruption to Iranian exports", the agency said.

The worldwide glut has been eradicated and "Opec still hasn't said anything about ending the deal early, which is only good for markets", said Ashley Petersen, lead oil analyst at Stratas Advisors in NY.

Oil's rise to $80/bbl is stoking concerns that the price rally will erode demand, but OPEC's giants so far aren't anxious.

Production from outside of Opec will grow by almost 1.9m b/d in 2018, led by the United States, a slightly higher rate than seen in last month's report.

OPEC kingpin Saudi Arabia said on Thursday it would make sure the world is adequately supplied with oil just as major consumer India expressed frustration with rising prices.

In addition, the IEA has cut its oil consumption forecasts as higher prices work to reduce future demand.

Brokerage Marex Spectron said the surge in US supplies was "strongly price-bearish", adding the economic outlook was also "firmly bearish" as "short-term credit conditions have worsened which. hasn't been priced correctly by the market".

Morgan Stanley's report predicts that the Brent price will reach $90 per barrel by 2020 as demand for crude oil skyrockets by 1.5 million barrels a day, supported by the new shipping rules.

Benchmark oil contract Brent North Sea surged above $80 a barrel Thursday, hitting the highest level since November 2014 on concerns that Iranian exports could fall due to renewed USA sanctions and reduce supply in an already tightening market.

Since the European Union is unlikely to follow the U.S.in re-imposing sanctions on Iran, the overall impact on the Persian Gulf state's exports will be "far more muted" than in the past, tanker tracker Petro-Logistics said in a note. The IEA acknowledged attention of market participants has shifted away from inventories to price volatility.



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