Crude oil prices boomed to a four-year peak on Tuesday, hurt by U.S. sanctions on Iranian crude exports and the apparent disinclination of Russia and OPEC to raise output to offset the global supply.
Oil prices were whipsawed in late morning on Tuesday when Trump told the U.S. General Assembly that OPEC is ripping the rest of the world by raising up oil prices.
The rates of Brent crude futures were up 73 cents, nearly 1 percent at $81.93 and by 12:21 P.M. ET, it touched a session peak of $82.20, this is the highest price since November 2014.
The oil prices are on course for the fifth quarterly increase, the most of gains since early 2007, when a six-quarter run led to a high record of $147.50 a barrel.
The U.S. is going to point Iran’s oil export with sanctions from Nov. 4, the U.S. is also pressuring on companies and governments across the world to involve in line and cut the purchases of oil.
Secretary-General of OPEC, Mohammad Barkindo said on Tuesday that it is crucial for OPEC to cooperate and to ensure they do not stick from one crisis to another.
The strong oil demand is forecasted by International Energy Agency that is of 1.4 million barrels per day for this year and 1.5 barrels per day in 2019.
Trump has demanded that Russia and OPEC increase the oil supplies to make up the expected fall in Iranian export, as Iran is a third largest producer in OPEC. However, Russia and OPEC have rebuffed such kind of demands.
The PVM Oil Associates strategist TamasVarga said that after the weekend meeting the voices who foresee $100 a barrel and comparing the current situation to 2007/08 are getting loud.
The manager of Ashburton Global Energy Fund Richard Robinson said that higher prices are almost certain on cards. The combination of health demand, tight supply, anemic spare capacity and falling global inventories down from under stored levels help and support the oil price to end the year above $90.
While China, Germany, Britain, Iran, and Russia on Tuesday said that they were ready to develop payment mechanisms to continue the trading despite putting the sanctions by the United States. Analysts accept the actions of Washington to tap between 1 million to 1.5 million bpd of crude oil.