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September 14, 2018 08:13 PM | Business

Commodity Champions: Here’s what experts have to say about crude hitting $80 mark

Oil rose on Friday, clawing back some territory after prices fell by the most in a month in the previous session, as the focus returned to supply concerns ahead of a November deadline for US sanctions on Iranian crude.

Brent crude was up 17 cents at $78.35 a barrel at 1044 GMT. The global benchmark fell two percent on Thursday after rising on Wednesday to its highest since May 22 at $80.13.

US West Texas Intermediate (WTI) futures were up 27 cents at $68.86 a barrel after dropping 2.5 percent on Thursday. Brent was set for a 2 percent weekly rise and WTI 1.7 percent.

The United States is renewing sanctions on Iran after withdrawing from a nuclear deal forged in 2015 between Tehran and world powers.

Washington reimposed some of the financial sanctions from August 6, while those affecting Iran's petroleum sector will come into force from November 4.

Indian refiners, traditionally major buyers of Iranian crude, will cut their monthly crude loadings from Iran for September and October by nearly half from earlier this year.

Supply concerns were stoked by data showing US crude production fell by 100,000 barrels per day (bpd) to 10.9 million bpd last week as the industry faced pipeline capacity constraints.

Azlin Ahmad, editor-crude oil at Argus Media, said she has seen strength in the crude oil prices this week and lot of it hinges on Iran as countries from Asia-Pacific started to reduce their imports of Iranian crude without the promise of a waiver from the US.

According to Ahmad, Iran sanctions has pushed Brent up closer towards 80 dollar and WTI is hovering between 69 and 70 dollar, "Iran is still a big factor in the market and of course, Venezuelan production continues to be quite limited right now and that is another factor."

Amrita Sen, chief oil analyst at Energy Aspect, said there is lot of volatility in the market not naturally, but because of the Iran factor and there is fear of trade war with China.

"I think the big thing is nobody in the market is expecting Iranian exports to down to zero, neither are we. But we have been more bullish than most in terms of how much we are going to lose from Iran and we believe we are going to lose 1.5-1.8 million barrels per day," Sen added.
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