Oil prices rose more than 1 percent on Friday, with Brent climbing to a four-year high, as USA sanctions on Tehran squeezed Iranian crude exports, tightening supply even as other key exporters increased production.
The most-active December Brent crude futures contract LCOv1 settled up 59 cents at $81.38 a barrel, below the session high of $81.90 but still within sight of Tuesday's four-year high of $82.55.
Case in point: Russian Federation, whose deputy energy minister, Pavel Sorokin, said on Monday that production of hard-to-recover oil is expected to rise by 10 percent to 860,000 bpd this year, and that "Many of our companies have advanced in this direction".
Worldwide benchmark Brent crude oil futures LCOc1 were at $85.28 per barrel, up 30 cents, or 0.4 percent, from their last close.
Futures were little changed in NY after closing Monday at the highest since November 2014.
U.S. President Donald Trump spoke to Saudi King Salman on Saturday on ways to maintain sufficient supply. It should be noted that the call to reduce oil prices comes from a major exporter, as United States oil production is booming at record levels with exports surpassing most OECD countries.
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That comes as the overall supply of oil looks set to decline, post USA sanctions against Iran and despite increases from Russian Federation and Saudi Arabia.
More fundamentally, oil markets have been pushed up by looming USA sanctions against Iran's oil industry, which at its most recent peak this year supplied nearly 3 percent of the world's nearly 100 million barrels of daily consumption.
Many analysts say OPEC will struggle to cover a decline in exports from Iran.
Given that OPEC and Non-OPEC rebuffed President Trump's demands to boost oil production in order to offset the loss of supply from Iran and Venezuela suggests that oil prices may continue to track higher. China's Sinopec said it had halved loadings of Iranian oil in September.
For now, soaring crude prices and weak emerging market currencies, including India's rupee and Indonesia's rupiah, may erode economic growth.
"U.S. (fiscal) tightening, higher oil prices and ongoing trade frictions are all taking their taking their toll on the growth outlook", HSBC said.