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Oil on the biggest crack in ten years if the global storage cushion disappears


Oil headed for its longest series of quarterly earnings in more than a decade, as threatening supply interruptions threaten to break a global market with little margin of error.

Futures rose 1.8 percent in New York on Friday, while the crude oil traded by London was on schedule for a fifth quarter, a mark not seen since the first half of 2008. This historical echo is due to consumers again causing eye problems and worry about the availability of backup supplies, just like ten years ago when the benchmark reached a high point ever above $ 147.

Fears are growing that the restriction of Iranian exports by American sanctions and the collapse of the Venezuelan oil industry will leave a big shortage in the market. These concerns have only been fueled this week because important producers from Saudi Arabia to Russia and the US indicate that their reserves are forbidden territory.

Some of the world's largest oil producers and traders warn that the three-digit prices may return quickly, with negative consequences for the economy.

"There is concern in the market that the loss of barrels from Iran and Venezuela will not be compensated by additional stocks, particularly from Saudi Arabia and Russia," said Gene McGillian, market research manager at Tradition Energy. "Ensuring that trade relations affect economic growth have been eliminated."

Oil has risen most in London in almost four years, after the OPEC showed little enthusiasm for increasing production despite President Donald Trump's demand for lower prices. The world will need additional supplies, because US sanctions will get rid of important importers, including India and South Korea, to buy Iranian crude oil.

Trading houses such as Trafigura Group Pte Ltd and Mercuria Energy Group Ltd have predicted that prices will exceed $ 100 per barrel. Banks, including Bank of America Corp. and JPMorgan Chase & Co. are not so bullish, but cancel their predictions. Meanwhile, BP Plc and Total SA warned that such a rally would damage demand, especially as tensions in the US and China are escalating.

Brent for November delivery rose $ 1.06 to $ 82.78 a barrel at 11:14 am on the ICE Futures Europe stock exchange in London. Since the end of June 2017 Brent has increased by 73 percent. The November contract will expire on Friday.

West Texas Intermediate for delivery in November rose $ 1.04 to $ 73.16 on the New York Mercantile Exchange. It exchanges a discount of $ 9.62 to Brent. The total traded volume was about 18 percent lower than the average over 100 days.

Investors are now watching what Trump is going to do after US Secretary of Energy Rick Perry has excluded the release of oil from the Strategic Petroleum Reserve, saying that the switch would "have a rather insignificant and short-term impact". Earlier this week, the president accused the Organization of Petroleum Exporting Countries of "taking away the rest of the world".

Other news about the oil market:

  • Gasoline futures rose 1.6 percent to $ 2,115 per gallon
  • A two-day increase turned a sludgy, sulfurous and low-quality crude into the world's most expensive oil benchmark this week, causing traders to be disturbed and the market moved
  • While oil refineries are committed to the consequences of more stringent marine fuel emission standards by 2020, at least one Asian processor is considering how to take advantage of it.

– With the help of Tsuyoshi Inajima, Sharon Cho and Grant Smith.

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