Oil prices rose Friday due to concern that U.S. sanctions against Iran would remove a substantial volume of crude oil from world markets at a time of rising global demand, Reuters reports.
“Now everyone is focused on the issue of spare capacity and the future,” said Tamar Essner, Nasdaq’s lead energy analyst. The market’s attention has shifted to a spate of disruptions after weeks of focus on supply coming online from OPEC and other major producers, she said.
U.S. crude rose 62 cents a barrel to $74.08 by 12:22 p.m., on track for a weekly rise of 8.2%. The session high of $74.43 was the highest since Nov. 2014. Benchmark Brent crude LCOc1 was up $1.54 at $79.39 a barrel after jumping as much as $1.85 to session high of $79.70. Brent was on track for a 5% weekly rise.
Iran pumps about 4.7 million barrels per day, or almost 5% of the total output in the world, much of it to China and other energy-hungry nations such as India.
The U.S. government hopes other big producers in the Organization of the Petroleum Exporting Countries and Russia will boost production to compensate for lost Iranian crude. But unplanned disruptions in Canada, Libya and Venezuela have made the world crude market tight, and many analysts and investors think strict enforcement of U.S. sanctions will further push up prices. Read the full story.
