Economy

Oil price nears $80, Nigeria’s output rises

Oil price nears $80, Nigeria’s output rises

"Going forward, economic uncertainty, and hence questions surrounding global oil demand, coupled with geopolitical tensions, will need to be factored into maintaining a balanced market in the months to come", the report said.

Oil futures rose on Wednesday, with Brent reaching $80 a barrel, after a larger-than-expected drop in U.S. crude inventories and as USA sanctions on Iran added to concerns over global oil supply.

"Markets ... are expecting substantial price pressure as Iran sanction loom", said Stephen Innes, head of trading for Asia-Pacific at futures brokerage OANDA in Singapore.

Oil markets were also watching Hurricane Florence offshore the United States amid surging demand for gasoline and diesel, although crude output will not be affected on the storm's current route.

Brent crude futures rose US$1.69, or 2.2 percent, to settle at US$79.06 a barrel.

US crude stocks fell by 8.6 million barrels in the week to September 7 to 395.9 million, the American Petroleum Institute (API) said on Tuesday.

Since spring when the Trump Administration said it would impose sanctions on Iran, crude traders have priced in a risk premium reflecting the supply shortages that may occur when exports from the third-largest OPEC member are cut.

Russian energy minister Alexander Novak on Wednesday warned of the impact of USA sanctions against Iran.

More news: California Commits to 100 Percent Renewable Energy By 2045

Benchmark Brent crude oil was up 50 cents at $77.87 a barrel by 0750 GMT.

He also warned of the impact of U.S. sanctions against Iran: "This is a huge uncertainty on the market - how countries, which buy nearly 2 million barrels per day of Iranian oil, will act".

World oil consumption will top 100 million barrels per day (bpd) in the next three months, putting upward pressure on prices, although emerging market crises and trade disputes could dent this demand, the International Energy Agency said on Thursday.

Demand for crude from the Organization of the Petroleum Exporting Countries will moderate in 2019 to 31.9 million bpd, from an estimated 32.3 million bpd this year, the IEA said.

That month Russian Federation produced 11.247 million bpd, a post-Soviet Union record-high.

As Middle East markets tighten, Asian buyers are seeking alternative supplies, with South Korean and Japanese imports of USA crude hitting a record in September.

But it said rising demand could also be checked.

The US crude production is expected to rise 840,000 bpd to 11.5 million bpd next year, lower than a previous expectation for a rise of 1.02 million bpd to 11.7 million bpd, the US Energy Information Administration said in a monthly report.


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