Oil rises as Iran sanctions create worry about supply shortfall
Jefferies bank warns of record low spare capacity with analysts expecting Iranian exports to drop by about 1-million barrels per day
London — Oil prices crept back towards four-year highs on Friday as traders anticipated a tighter market due to US sanctions on Iran’s crude exports. Benchmark Brent crude oil was up 10c a barrel at $84.68 by 8.20am GMT. On Thursday, Brent fell by $1.34 a barrel or 1.6%. The contract is on course for a gain of about 2.5% for the week. US light crude was up 30c at $74.63, a gain of more than 2% since last Friday. “The market mood is exceptionally bullish, with fears growing that the US demands for an Iran oil embargo could cause a significant supply shortfall,” said Norbert Rücker, head of macro- and commodity research at Julius Bär. Both benchmarks retreated on Thursday following a rise in US oil inventories and after Saudi Arabia and Russia said they would raise output to at least partly make up for expected disruptions from Iran, which is oil cartel Opec’s third-largest producer. But the pull-back did little to dent a rise of 15% to 20% in oil prices since mid-August, pushing the...
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