Oil prices hit a fresh high above $75 a barrel after US president Donald Trump called the Iran nuclear deal “insane” on Tuesday, pushing prices to the loftiest level since 2014 as traders bet Washington is preparing to reimpose sanctions against Tehran.
Brent crude oil, the international benchmark, reached a high of $75.47 a barrel in afternoon London trading, having crept above $75 a barrel for the first time in more than three years in electronic trading last night.
US benchmark, West Texas Intermediate, traded as high as $69.38 a barrel.
Oil prices have rallied by 22 per cent since early February and have more than doubled since early 2016, boosted by joint production cuts between Opec and Russia.
More recently gains have been boosted by mounting geopolitical fears as oil markets have tightened up, with Venezuela’s output falling sharply and expectations the US will return to targeting Iran’s oil exports if the Trump administration withdraws from the 2015 nuclear deal.
On Tuesday Mr Trump said Tehran would face “bigger problems” if they moved to restart their nuclear programme, branding the deal with them “insane” shortly before he was due to sit down with French President Emmanuel Macron.
His comments followed a broadside at Opec on Friday for driving up prices “artificially” after Saudi Arabia’s energy minister said that the world economy could handle higher prices.
The US president’s comments toward Opec last week were seen by some analysts as a sign he wants them to cool oil’s rally before his decision next month whether to reimpose sanctions on Iran – something Saudi Arabia, Tehran’s regional rival, has been lobbying him to do.
The oil market is expected to be tighter in the second half of this year, partly due to seasonally strong demand in the US summer driving season, when many motorists hit the roads for vacation. The market has tightened despite record-high US crude oil production, with the shale industry boosting output partly due to the recovery in prices.
Source: FT.com
