Global Benchmark Brent crude jumped more than 3% (25 Sept 2018) to above USD80 a barrel after Saudi Arabia and Russia ruled out any immediate increase in production despite calls by U.S. President Donald Trump for action to raise global supply.
The OPEC and non-OPEC states, including top producer Russia gathered on 23 Sept 2018 meeting ended with no formal recommendation for any additional supply boost to counter falling supply from Iran.
Industry observers opine the markets are still being driven by concerns about Iranian and Venezuelan supply with the failure of the producers to address that adequately. It is now (Sept 2018) increasingly evident, that in the face of producers reluctant to raise output, the market will be confronted with supply gaps in the next three-six months from Sept 2018 that it will need to resolve through higher oil prices.
Industry observers say Brent could rise to $90 per barrel by Christmas and pass $100 in early 2019, as markets tighten once U.S. sanctions against Iran are fully implemented from November 2018.
U.S. sanctions on Iran could lead to a loss of 1.5 million barrels per day.
If Brent prices climb past $82 a barrel, prices up to $90 would be a near-term possibility.
Some have said softening demand from trade tensions between the U.S. and China to offset loss of Iranian supply, but unless trade tensions show signs of eroding Chinese demand, oil prices will surge further.
Key Beneficiaries: Hibiscus. Reach and SAPNRG (Unless U can digest their high debts).
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