Brent crude oil rises for a sixth day as supplies tighten amid strong demand

Brent crude oil futures climbed to as high as $75.20 a barrel in early trading on Tuesday, the highest since Nov. 27, 2014. (Reuters)
Updated 24 April 2018
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Brent crude oil rises for a sixth day as supplies tighten amid strong demand

  • US West Texas Intermediate crude futures were at $68.98 a barrel, up 34 cents
  • The potential of renewed US sanctions against Iran is pushing prices higher

SINGAPORE: Brent crude oil rose for sixth day on Tuesday, passing $75 a barrel, on expectations that supplies will tighten because fuel is rising at the same time the US may impose sanctions against Iran and OPEC-led output cuts remain in place.
Brent crude oil futures climbed to as high as $75.20 a barrel in early trading on Tuesday, the highest since Nov. 27, 2014. Brent was still at $75 a barrel at 0311 GMT up 29 cents, or 0.4 percent, from its last close.
Brent’s six-day rising streak is the most since a similar string of gains in December and it is up by more than 20 percent from its 2018 low in February.
US West Texas Intermediate (WTI) crude futures were at $68.98 a barrel, up 34 cents, or 0.5 percent from their last settlement. On Thursday, WTI rose to as high as $69.56, the most since Nov. 28, 2014.
Markets have been lifted by supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC) which were introduced in 2017 with the aim of propping up the market.
The potential of renewed US sanctions against Iran is also pushing prices higher.
Stephen Innes, head of trading for Asia/Pacific at futures brokerage OANDA said new sanctions against Tehran “could push oil prices up as much as $5 per barrel.”
The US has until May 12 to decide whether it will leave the Iran nuclear deal and re-impose sanctions against OPEC’s third-largest producer, which would further tighten global supplies.
“Crude prices are now sitting at the highest levels in three years, reflecting ongoing concerns around geopolitical tensions in the Middle East, which is the source of nearly half of the world’s oil supply,” ANZ bank said.
“Oil strength is coming from Saudi Arabia’s recent commitment to get oil back up to between $70 to $80 per barrel as well as inventory levels that are back in the normal range,” said William O’Loughlin, investment analyst at Australia’s Rivkin Securities.
OPEC’s supply curtailments and the threat of new sanctions are occurring just as demand in Asia, the world’s biggest oil consuming region, has risen to a record as new and expanded refineries start up from China to Vietnam.
One of the few factors that has limited oil prices from surging even more is US production, which has shot up by more than a quarter since mid-2016 to over 10.54 million barrels per day (bpd), taking it past Saudi Arabia’s output of around 10 million bpd.
As a result of its rising output, US crude is increasingly appearing on global markets, from Europe to Asia, undermining OPEC’s efforts to tighten the market.


Jair Bolsonaro uses WEF platform to sell a ‘new Brazil’ to Davos elite

Updated 15 min 59 sec ago
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Jair Bolsonaro uses WEF platform to sell a ‘new Brazil’ to Davos elite

DAVOS, Switzerland: Brazil’s new president, Jair Bolsonaro, threw out the welcome mat for big business and major investors on Tuesday, telling a summit of CEOs at the World Economic Forum in Davos that his government would make the country one of the top 50 in which to do business.
Bolsonaro said he would work to open up Brazil’s relatively closed economy, reduce and simplify taxes, privatise assets and give his new justice minister the tools to tackle corruption and organized crime.
The newly-elected Brazilian president told the audience that he was “moved and honored” to be addressing the good and the great at Davos, calling the forum an opportunity to show the world a revamped Brazil that he was building.
“I want to introduce to all of you the new Brazil we are building,” he said. “We are committed to changing our history.”
He reassured political and business leaders in attendance that his government has the credibility and the tools required to reform his country.
Big investment to turn Brazil into a global tourist destination was the main thrust of Bolsonaro’s speech. But given the importance placed on climate change and protecting the natural world, he was keen to point out that he would strive to preserve the environment while developing the economy — saying policies on the two “should go hand-in-hand.”
Bolsonaro surfed a populist wave last year to ride to power, vowing an end to rampant corruption and a restoration of law and order in Brazil.
But staging his first foreign trip as president, Bolsonaro has left behind a scandal about suspicious payments involving his politician son Flavio Bolsonaro, who denies any wrongdoing.
Focusing instead on a pro-business message at the WEF, Bolsonaro told his well-heeled audience that he was determined to open up Brazil’s economy.