The current crude price of Brent moved higher, to over $106 per barrel, with concerns regarding the supply provided by the North Sea and the Middle East, although worries about a weakening global economy limited the increase.
The Congress of the United States enacted a new set of sanctions against Iran with the purpose of punishing banks, shippers and insurance companies that aid Tehran in selling its oil.
This adds to the oil trade sanctions that was approved into law last December signalling buyers in South Korea, India, Japan and other countries to cut their oil purchases from Iran.
Brent crude rose 73 cents to reach $106.63 a barrel. The current crude price of the U.S. benchmark gained 70 cents to $87.83, a price that is moving to its loss for the second straight week.
Senior commodities strategist of Singapore’s ANZ Bank, Mr. Nick Trevethan, said that the war in Syria, the conflict in Iran, the maintenance plan in the North Sea and the reduced daily supply from OPEC are all adding up and giving support to current crude oil prices for Brent blend.
Regular planned maintenance work in the North Sea’s British sector will reduce the production of crude oil in the month of September.
The basis of the Brent contract is the four crude oil blends produced from the North Sea namely Brent, Oseberg, Ekofisk and Forties, and September’s export programs were anticipated to drop sharply.
OPEC’s Seaborne oil exports, excluding Ecuador and Angola, will drop by 120,000 barrels daily in the four weeks ending August 18, according to the UK Consultancy Oil Movements.
By: Chris Termeer