27-09-2018 05:40 PM
Oil prices on Tuesday were near four-year highs touched in the previous session, as alarming U.S. sanctions against Iran and reluctance by the Organization of the Petroleum Exporting Countries (OPEC) to raise productionheld the market.
According to Mr.Ponmudi, Market Expert & Managing Director of Enrich Commodities - Iran is likely to lose large export volumes and unwillingness to raise production, the market is not ready to bridge the supply gap.
The name given to the group of oil producers is OPEC+, as well as non-OPEC supplier Russia, that agreed to restrict production starting in 2017.
At the same time asGermany, Russia,Britain, China, France and Iran on Tuesday said they were resolute to build up payment mechanisms to continue trading regardless of the sanctions by the United States.
"We view Brent's rally above $80 per barrel as fundamentally justified," said Fitch Solutions in a note.
U.S. President Donald Trump has insisted that OPEC and Russia augment their supplies to make up for the likely drop in Iranian exports. Iran is the third-largest producer in OPEC.
Any officialpronouncement on oil production by the producer group, with the exception of an astonishing meeting, will only take place at the December meeting. Consequently the time duration for oil prices to prospectively extend gains is pretty wide as Iran loses exports.
According to a statement made by Kelty - "We don't believe OPEC can actually raise output significantly in the near term, as the physical spare capacity in the system is not that high,"