Oil. Picture: REUTERS
Oil. Picture: REUTERS

Singapore — US oil prices rose on Tuesday, breaking past $70 a barrel, after two Gulf of Mexico oil platforms were evacuated in preparation for a hurricane.

US West Texas Intermediate (WTI) crude futures were at $70.05 a barrel at 3.53am GMT, up 25c, or 0.4 percent from their last settlement.

Anadarko Petroleum said on Monday it had evacuated and shut production at two oil platforms in the northern Gulf of Mexico ahead of the approach of Gordon, which is expected to come ashore as a hurricane.

International Brent crude futures, by contrast, lost ground, trading at $78.07 a barrel, down 8c from their last close.

This came as India allowed state refiners to import Iranian oil if Tehran arranges and insures tankers.

Many international shippers have stopped loading Iranian oil as US financial sanctions against Tehran prevents them from insuring its cargoes.

Mirroring a step by China, where buyers are shifting nearly all their Iranian oil imports to vessels owned by the National Iranian Tanker Company (NITC), this means that Asia’s two biggest oil importers are making plans to continue Iranian purchases despite pressure by Washington to cut orders.

Traders said Brent was also pressured by emerging-market turmoil and the strong dollar, which makes crude imports for countries using other currencies more expensive.

Changing market

Britain’s Barclays bank said on Tuesday that oil markets had changed since 2017 when the concern about rising supply was more evident.

"US producers are resisting temptation and exercising capital discipline, Opec and Russia have convinced market participants they are managing the supply of over half of global production, the US is using sanctions more actively, and several key Opec producers are at risk of being failed states," Barclays said.

Crude oil "prices could reach $80 and higher in the short term", the bank said, although it added that despite these developments global supply may exceed demand in 2019.

For 2020, Barclays said it expects Brent to average $75 a barrel, up from its previous forecast of just $55 a barrel.

French bank BNP Paribas struck a similar tone, warning of "supply issues" for the rest of the year and into 2019.

"Crude oil export losses from Iran due to US sanctions, production decline in Venezuela and episodic outages in Libya are unlikely to be offset entirely by corresponding rises in Opec+ [Opec and non-Opec] production due to market share sensitivities," the bank said.

BNP Paribas expects Brent to average $79 a barrel in 2019.