Brent crude crossed $80-mark on Thursday amid reports of tightening supplies and strong demand, even as wider geo-political issues concerning the Iran nuclear deal continued to offer support.
The global benchmark grade was last trading up 1.1 percent at $80.18 per barrel (bbl) – the highest level since November 2014.
US West Texas Intermediate (WTI) crude futures were last up 0.8 percent at $72.04/bbl.
“Supply concerns are top of mind after the United States left the Iran nuclear deal,” Norbert Rücker, head of macro and commodity research at Julius Baer, said in a note.
Meanwhile, French energy firm Total said it could exit the billion dollar gas project in Iran, if it fails to get a waiver from US sanctions against the OPEC member.
“Total will not be in a position to continue the SP11 project and will have to unwind all related operations before 4 November 2018 unless Total is granted a specific project waiver by the US authorities with the support of the French and European authorities,” Total said in a statement.
Earlier this month President Donald Trump pulled the US out of the Iran sanction deal, raising the possibility of slowing down supply from the OPEC member.
The focus is now on the reaction of other signatories in the deal, including Europe, China and Russia.
Rücker said while the Iran sanctions keep the uncertainty and noise level elevated, the risk of a supply disruption appears small.
“We maintain a neutral view on oil and see both large upside and downside risks in the near term,” he said. “As a result of the price surge, we lift our oil price targets.”
Write to Nadeshda Zareen at nadeshda.zareen@argaamplus.com
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