Price of oil soars as OPEC ignore US threats

Price of oil soars as OPEC ignore US threats

Price of oil soars as OPEC ignore US threats

/ Opec / Tuesday, 25 September 2018 10:34

Brent oil soared to its highest level since November 2014 - following the decision by OPEC members and other prominent global producers to ignore pressure being directed towards them by US President Donald Trump, who has threatened further sanctions against Iran unless oil prices are reduced.

Brent North Sea crude for delivery soared to a peak of $80.94 per-barrel, which is the highest level it has reached in almost four years. The benchmark Brent contract later stood at $80.85, up $2.05 from Friday's close.
New York's main contract, West Texas Intermediate (WTI) or light sweet crude for delivery in November, added $1.52 to $72.30 after earlier striking a two-month pinnacle.

Oil prices increased after it emerged that the world’s top producers opted to maintain its current output in a meeting of members in Algeria over the weekend.

The committee which consisted of members from the Organization of the Petroleum Exporting Countries (OPEC) cartel and non-OPEC producers said it was satisfied with the current market outlook, which represented an overall healthy balance between supply and demand.

Saudi Arabia’s influential oil minister Khalid al-Falih has left the door open to a future production hike, as supplies continue to tighten due to the US’s decision to impose tough sanctions on Iranian oil from November onwards.

Analyst at CMC Markets David Madden said the decision by Saudi Arabia and Russia has left the US vulnerable.

Madden said, “Saudi Arabia and Russia have confirmed that they’re not raising output -- and this is bad news for President Trump as he wants a lower oil price that is good for business.  The Algiers meeting did not bring about an increase in output -- and that is fueling the rally. Fears that supply will be hit when the US sanctions on Iran kick in come November are pushing up oil prices."

OPEC in December 2016 concluded an agreement with non-member states -- including Russia -- to reduce output in order to arrest sliding prices. Sunday's meeting in Algiers brought together OPEC oil ministers and non-OPEC signatories to the 2016 agreement, as they seek to extend their cooperation.

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