Oil hits four-year high as OPEC, allies maintain supply cut

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"Saudi Arabia and Russian Federation ruled out any expeditious supply increases at the Algeria meeting while decidedly ignoring US President Trump's call to increase supplies and ease price pressures".

Oil benchmark Brent traded little changed on Wednesday after rising to its highest in almost four years in the previous session, while U.S. crude futures fell as United States' officials tried to assure that the market would be well-supplied before sanctions are re-imposed on producer Iran. However, the consensus has now moved to as much as 1.5 million barrels daily as the U.S.is“incredibly serious” about its measures, he said.

In contrast, OPEC said demand for oil in OECD countries would fall from the early 2020s, but would still be the number one source of energy through to 2040.

US President Donald Trump slammed the Organization of the Petroleum Exporting Countries (OPEC) last week, saying the 15-member oil cartel should keep crude prices low because of the military protection the US provided for the region.

The International Energy Agency forecast strong oil demand growth of 1.4 million barrels per day (bpd) this year and 1.5 million bpd in 2019, and said in its most recent report that the market was tightening.

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While output C-OUT-T-EIA remains around the record of 11 million barrels per day (bpd), recent subdued US drilling activity points towards a slowdown.

Major oil trading houses are predicting the return of $100 crude for the first time since 2014 as the market braces for the loss of Iranian supplies because of USA sanctions. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

But he said the trade war between China and the U.S. as well as Trump's sanctions on Iran were creating new challenges for oil markets.

"We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices!"

"We are not targeting a price, we are aiming for the stability of the market", for its part, has argued the minister emirati Energy, Souhail al-Mazrouei, chairman of the conference of the Opec.

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"We view Brent's rally above $80 per barrel as fundamentally justified", said Fitch Solutions in a note.

J.P. Morgan said in its latest market outlook, published on Friday, that "a spike to $90 per barrel is likely" for oil prices in the coming months due to the Iran sanctions.

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.

"Balances are precarious and the lack of spare capacity could see crude pricing well above US$90 or even US$100, should all of the potential risk in the market materialize", analysts including Ed Morse said in the note. Analysts say Trump wants to try to head off higher gasoline prices that could hurt Republican candidates in the November elections.

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