Brent crude and US West Texas Intermediate (WTI) prices increased on Friday over oil supply concerns ahead of the November deadline on US sanctions on Iran.
While Brent crude increased by 25 cents to stand at $78.43 a barrel, WTI futures grew 41 cents to reach at $69 a barrel, reported Reuters.
The futures contracts of Brent crude and WTI are set to increase around 2% this week.
French bank BNP Paribas oil strategist Harry Tchilinguirian told the Reuters Global Oil Forum: “We think the oil market will have another go at pushing Brent above $80 a barrel.
“The looming supply gap that the loss of Iranian oil exports represents is still ahead of us and that early November U.S. deadline to reduced imports to zero is fast approaching.”
The US Government is renewing sanctions on Tehran after withdrawing from a nuclear deal signed by Iran and the world’s top powers in 2015.
The US re-imposed some part of sanctions on Tehran last month. The sanctions on the OPEC producer’s petroleum sector will begin from 4 November.
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Indian refinery units that buy the bulk of their crude from Iran will reduce their monthly crude loadings by 50% for September and October, compared to earlier this year.
Oil supply concerns grew as data indicated drop in US crude production by 100,000 barrels per day to 10.9 million bpd last week.
Meanwhile, the International Energy Agency (IAE) cautioned that even as the oil market was tightening, economic risks across the world are simultaneously increasing.
IAE was quoted by Reuters as saying: “As we move into 2019, a possible risk to our forecast lies in some key emerging economies, partly due to currency depreciations versus the U.S. dollar, raising the cost of imported energy.
“In addition, there is a risk to growth from an escalation of trade disputes.”
The state-operated China Daily newspaper reported that China would not be pressurised by US demands in trade negotiations, while US President Trump stated on Twitter that the US was under no pressure to have a deal with China.