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Oil pushes past $80 as Iran fears mount

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"Oil has risen above $80 a barrel to its highest level this year amid concerns about supplies from Iran and a fall in US stockpiles.

Brent crude rose more than 1% to $80.13 - the first time it has breached $80 since late May.

The rise reflects concern about the impact of US sanctions against Iran that will target oil exports.

"Iran is increasingly becoming the preoccupation of the crude market," said consultants JBC Energy.

"The last couple of weeks have seen the expected squeeze on Iranian crude flows taking shape, with overall outflows down markedly."

Gordon Gray, HSBC's global head of oil and gas equity research, said there were "real risks" that Brent could hit $100 a barrel.

"The fact that much higher supply is already needed from the likes of Saudi Arabia - and the low levels of spare capacity remaining - leave the global system highly vulnerable to any further significant outage," he said.

'Huge uncertainty'

Russian energy minister Alexander Novak said global oil markets were fragile due to geopolitical risks and supply disruptions.

He also warned of the impact of US sanctions against Iran: "This is a huge uncertainty on the market - how countries, which buy almost 2 million barrels per day of Iranian oil, will act. The situation should be closely watched, the right decisions should be taken."

Opec, the Organization of the Petroleum Exporting Countries that accounts for 40% of global production, cut its forecast for oil demand growth next year in its monthly report.

Oil traders were also watching the progress of category 4 Hurricane Florence, which is expected to make landfall in the US by Friday.

US crude rose 91 cents to $70.16 a barrel.

In January Brent crude hit $70 a barrel for the first time since December 2014."

Source – BBC News

About the author

Philip Scott

Head of Equities, Director

Philip has worked as a Private Client Stockbroker for nearly 20 years, commencing his career in Operations with Rensburg Sheppards (now part of Investec plc) before spending 9 years with Killik & Co advising on and directly managing portfolios. He joined SI Capital in 2006 to head up the Private Client Advisory desk.

Philip is a regular contributor to local media commenting on stock market dynamics and is a Chartered Member of the Chartered Institute for Securities & Investment (MCSI). His RDR qualification gained special recognitionfrom the CISI for achieving the highest combined pass mark in the country for the Investment Advice Diploma in 2012.

“At SI Capital I enjoy being part of a talented team who collectively share the same desire to provide excellence in service.  My focus is to ensure that each client receives effective and optimal management of their assets.”

Philip lives locally, is married with 2 daughters and is an avid sports fan (if now predominantly from the sidelines).  His other interests include music and film.

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