Oil prices at four-year high with no supply boost in sight

Oil prices at four-year high with no supply boost in sight

Under previous USA sanctions, some buyers received waivers as long as they reduced imports but the current administration aims to cut Iran's oil exports down to zero to force Tehran to negotiate a nuclear treaty.

"We will ensure prior to the re-imposition of our sanctions that we have a well supplied oil market", Washington's special envoy for Iran, Brian Hook, told a news conference at the United Nations General Assembly on Tuesday evening.

"The impending sanction of Iranian output not only removes around 1 million barrels per day (bpd), but the potential supply response of a further 2 million bpd", he said.

Japan's MUFG, which maintains a base case oil price projection of $72 per barrel for 2018, views any rally of Brent up to $100 per barrel as "short-lived".

Trump said last week that OPEC "must get prices down now, but Iranian oil minister, Bijan Zanganeh, said on Monday OPEC had not responded positively to Trump's demands".

Several months ago, OPEC+ (the name given to OPEC and its allies) agreed to increase output about 1.4 million barrels per day to cover the expected shortage.

Falih said Saudi Arabia had spare capacity to raise output but such a move was not required at the moment and might not be needed next year as, according to OPEC's projections, a stellar rise in non-OPEC production could exceed global demand growth. Trafigura co-head of oil trading Ben Luckock said at APPEC that he sees $90 oil by Christmas and $100 in early 2019.

NEW YORK, Sept 25 (Reuters) - Crude oil prices shot to a four-year high on Tuesday, catapulted by imminent us sanctions on Iranian crude exports and the apparent reluctance of OPEC and Russian Federation to raise output to offset the potential hit to global supply.

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Cosmo Oil, a unit of Japan's Cosmo Energy Holdings, is the country's third-largest oil refiner by sales. Output in Venezuela is also slumping due to an economic crisis. The kingdom does expect to pump more in September and increase again in October, he said.

Major oil companies took some solace from OPEC's assurances.

"The US is not capable of bringing our oil exports to zero".

All on the heels of US sanctions.

Wall Street bankers and hedge funds also saw some caveats to the bullish mood.

The market was "increasingly concerned about dwindling (U.S.) inventories", ANZ bank said on Monday. Earlier this month, the International Energy Agency warned there was a risk of oil prices spiralling higher in the coming months, posing a dilemma for the chancellor, Philip Hammond, as he looks to raise fuel duty.

Rather than OPEC controlling prices, analysts have instead blamed Trump's latest round of sanctions on OPEC-member Iran for driving up the price, as supply from Tehran decreased.

The bank forecasts Brent and US benchmark WTI prices to average $85/Bbl and $76/Bbl, respectively, in the next six months. Blanch noted that Iranian crude exports have already fallen by 600,000 barrels a day in August compared to April levels, significantly exceeding the bank's initial expectations.

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