Brent crude holds near four-year high as $100 bets soar

  • by Ahmed Mamdouh
  • October 4, 2018, 13:1 AM
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Oil prices held near their highest level in four years on Thursday amid supply concerns on Iran sanctions and absence of clear announcement of output rise by OPEC+.

The global oil benchmark Brent crude set a new peak at $86.73 a barrel on Wednesday, the highest level since late October 2014, where it is currently hovering around $85.85.

Crude oil eased after touching a high of $76.88 a barrel yesterday to trade lower today around $75.90.

It seems that large part of the recently rally has been driven by mounting speculations that oil prices would soon hit $100 a barrel.

The number of open positions on $100 December 2019 WTI call options - bets on futures hitting that price by the end of 2019 - has risen by 30 percent in the last week to a record 31,000 lots, according to CME data reported by Reuters.

Data released yesterday showing that U.S. crude inventories climbed 8 million barrels last week, coming four times higher than market forecasts, failed to stop oil prices from recording a new peak.

Meanwhile, supply concerns are elevating with the new U.S. sanctions on Iran exports taking effect starting from November 4.

Some analysts predict a sharp drop in Iran’s oil exports to $1 million barrels a day from more than 2.5 million barrels per day.

Saudi Energy Minister Khalid al-Falih said his country had raised output to 10.7 million barrels per day in October and would produce more in November.

While Russia and Saudi Arabia had agreement last month to raise oil production, there is still no official announcement regarding this matter.

Eyes will focus tomorrow on Baker Hughes rig count report on U.S. drillers, where the latest report signaled U.S. energy companies slashed their oil rigs by three in the week ended Sept. 28.

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