Active Stocks
Mon Mar 18 2024 15:55:53
  1. Tata Steel share price
  2. 149.60 5.69%
  1. Tata Motors share price
  2. 972.20 2.75%
  1. ITC share price
  2. 417.40 -0.51%
  1. State Bank Of India share price
  2. 730.70 -0.18%
  1. ICICI Bank share price
  2. 1,082.00 0.32%
Business News/ Industry / Energy/  Oil prices firm with Brent nearing $80 on supply worries
BackBack

Oil prices firm with Brent nearing $80 on supply worries

Oil prices rise, with Brent edging closer to $80 per barrel, on concerns that Venezuela's crude output could drop further following a disputed presidential election and potential US sanctions

Brent crude futures were at $79.37 per barrel at 12.02pm, up 15 cents, or 0.2%, from their last close. Brent broke through $80 for the first time since November 2014 last week. Photo: ReutersPremium
Brent crude futures were at $79.37 per barrel at 12.02pm, up 15 cents, or 0.2%, from their last close. Brent broke through $80 for the first time since November 2014 last week. Photo: Reuters

Singapore: Oil prices rose on Tuesday, with Brent edging closer to $80 per barrel, on concerns that Venezuela’s crude output could drop further following a disputed presidential election and potential US sanctions.

US also toughened its stance on Iran and made a list of sweeping demands, which could further curb the country’s crude oil exports and boost oil prices.

Brent crude futures were at $79.37 per barrel at 12.02pm, up 15 cents, or 0.2%, from their last close. Brent broke through $80 for the first time since November 2014 last week. US West Texas Intermediate (WTI) crude futures were at $72.45 a barrel, up 21 cents, or nearly 0.3%.

“(Oil inventory) is tight and the US will probably tighten sanctions on Venezuela which will make the Venezuela situation worse and which means we can expect continued falling Venezuelan production," said Tony Nunan, oil risk manager at Mitsubishi Corp in Tokyo.

“Combined with expectations for falling Iranian production as the U.S. pressures allies to reduce their imports, this will push crude oil prices up to $80 a barrel and we think it can go higher."

Venezuela’s socialist President Nicolas Maduro faced widespread international condemnation on Monday after his re-election in a weekend vote his critics denounced as a farce cementing autocracy in the crisis-stricken oil producer. US is actively considering oil sanctions on Venezuela, where output has dropped by a third in two years to its lowest in decades.

“Tightening the economic screws will severely cripple ... Venezuela’s ability to export while making it virtually impossible for the country to acquire dollars," said Stephen Innes, head of trading for Asia-Pacific at futures brokerage OANDA in Singapore.

Concerns that looming US sanctions on Iran will curb that country’s crude exports have also been boosting oil prices in recent weeks.

US on Monday demanded Iran make sweeping changes - from dropping its nuclear programme to pulling out of the Syrian civil war - or face severe economic sanctions as the Trump administration hardened its approach to Tehran.

This could reduce Iranian oil exports by 200,000 barrels-per-day by the fourth quarter, Mitsubishi Corp’s Nunan estimated.

Elsewhere, Washington and Beijing both claimed victory on Monday as the world’s two largest economies stepped back from the brink of a global trade war and agreed to hold further talks to boost US exports to China.

Growing production of shale oil could curb oil prices eventually and widen the price spread between WTI and Brent crude oil, said Nunan.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Industry News, Banking News and Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 22 May 2018, 12:29 PM IST
Next Story footLogo
Recommended For You
Energy Stocks
₹1,901.8-1.67%
₹161.15-0.22%
₹497.6-0.52%
₹82.97-0.52%
₹3160.36%
Switch to the Mint app for fast and personalized news - Get App