Oil within sight of multiyear high

London — Oil rose further above $84 a barrel on Friday, within sight of a multiyear high hit this week, as expectations oil cartel Opec and its allies will keep supply tight countered rising US inventories and the prospect of more Iranian exports.

Algeria said on Thursday a crude output increase by Opec and its allies in December should not exceed 400,000 barrels per day because of risks. The alliance, which is gradually unwinding last year's record output cuts, meets on November 4.

“Supply will therefore continue to play catch-up with demand in the immediate term,” said Stephen Brennock of oil broker PVM. “In short, Opec+ is intent on continuing to act as a key pillar of price support.”

Brent crude rose 21 cents, or 0.3%, to $84.53 a barrel by 8.22am GMT, while US West Texas Intermediate crude added 10 cents, or 0.1%, to $82.91. Both benchmarks touched multiyear highs on Monday.

Crude has surged in 2021 as economies recover from the pandemic. Still, prices are on track to fall this week — the first weekly drop in about two months for Brent.

The heat came out of the rally due to easing concern about surging natural gas and coal prices that have spurred fuel-switching in power generation, and from signs of more oil supply.

This week’s US inventory figures showed crude stocks rose by a more-than-expected 4.3-million barrels.

Iran said talks with world powers on reviving its 2015 nuclear deal will resume by the end of November, bringing it a step closer to boosting oil exports currently under US sanctions. Still, expectations of Iran supply returning to the market in the short term look to have faded.

“The potential restart of nuclear talks with Iran, and the potential return of Iranian crude to markets legally, seems to have run its course,” said Jeffrey Halley of brokerage Oanda.

Reuters