Brent crude LCOc1 hit its highest since November 2014 at $81.39 per barrel, up $2.59 or 3.3 percent, before easing to $80.86 by 1:09 p.m. EDT (1705 GMT).
The US President said in a tweet last week that Opec "must get prices down now!" by raising global output. The U.S. Energy Information Administration (EIA) expects domestic crude oil production will increase over the next five years and then flatten after 2022, staying at about 11 million to 12 million barrels per day through 2050.
For all these urgent supply pressures, the world's largest oil producers adopted a sit-back-and-wait approach at their meeting in the Algerian capital on Sunday.
Nearly 2 million barrels per day (bpd) of crude could be taken out of the market as a result of the USA sanctions against Iran by the end of the fourth quarter this year, said Daniel Jaeggi, president of commodity merchant Mercuria Energy Trading, making a crude price spike to $100 a barrel possible. He sees US$90 oil by Christmas and US$100 in early 2019.
Iran will keep on selling oil in defiance of USA attempts to prevent Tehran from reaping profits from its major export earner, according to the head of the Iranian delegation at Sunday's meeting of oil producers in Algiers. WTI crude, the benchmark North American contract, was up 1.7 per cent at $72 U.S. a barrel. The global benchmark traded at an US$8.40 premium to West Texas Intermediate for the same month.
But the rise in prices doesn't seem to be an issue for Saudi Arabia, with Energy Minister Khalid al-Falih saying after a meeting of OPEC and its allies in Algiers at the weekend that there was no plan to boost output, even though they could if needed. "The reason Saudi Arabia didn't increase more is because all of our customers are receiving all of the barrels they want". That suggests OPEC's power to influence the market will be tempered by US production for about another decade.
The lack of OPEC's immediate action could mean higher prices. Citigroup Inc. sees crude at that level in the fourth quarter, but sees risks that it will go higher.
Dated Brent could see the biggest overhaul since the North Sea crude became a benchmark more than 30 years ago as S&P Global Platts considers including oil from as far away as Central Asia, West Africa and USA shale fields in its price assessment.
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