ULOG: 24 "Oil Prices Reach the Highest Record for 4 Years"

Img source : noreste.net

Brent crude rose almost 2% after reaching a four-year high on Wednesday (3/10).

The market focused on impending US sanctions on Iran, while ignoring the biggest weekly developments in US crude stockpiles and higher reports on Saudi Arabian and Russian production.

"There is no problem between here and November 4," said Bob Yawger, director of futures at Mizuho in New York, referring to the date when US sanctions are in full force.

US crude inventories jumped 8 million barrels last week, four times that of analysts and the biggest increase since March 2017, the Energy Information Administration said.

The price of Brent crude rose US $ 1.49 (1.8%), settling at US $ 86.29 per barrel, after reaching US $ 86.74 which was the highest price since 30 October 2014.

US crude oil prices closed up US $ 1.18 (1.6%) higher at US $ 76.41 per barrel, after touching a session high of $ 76.90.

Both benchmark prices fell briefly after the US government released the reserve figures, but then continued their ascent. "Speculative communities take the opportunity to buy above," Yawger said.

At the beginning of the session, crude was pressured lower as Saudi Energy Minister Khalid al-Falih said the kingdom had increased production to 10.7 million barrels per day in October and would pump more in November. The highest record for Saudi output was 10.72 million bpd in November 2016.

Russia and Saudi Arabia reached an agreement in September to increase oil production in order to cool price increases and notify
The United States before meeting in Algeria with other producers, four sources familiar with the plan told reporters.

Iran, however, accused Saudi Arabia and Russia of violating the OPEC agreement on reducing production by producing more crude oil.

The Organization of Petroleum Exporting Countries and its allies has limited supply since 2017 to get rid of excess. They reduced some of the cuts in June, under pressure from US President Donald Trump to cool prices.

An analyst said the Saudi plan to pump more would not change much.

"The Saudis are still very shy, the market wants to see something more proactive," said Petromatrix analyst Olivier Jakob. "That's why the market doesn't react too much to different headlines."