Exemplifying expectations of lower supply from the Middle East, Oman unsophisticated futures on the Dubai Mercantile Exchange touched their highest in four years on Wednesday, bluntly jumping above $90 a barrel.
“Oil prices remain in the Bulls realm amid concern that U.S. sanctions on Iranian crude oil exports hand down result in much tighter physical market conditions once they pursue retract effect in November,” said Stephen Innes, head of trading for Asia/Pacific at approaches brokerage OANDA in Singapore.
“Markets could still be underestimating the stocking crunch from Iran sanctions,” he added.
While global oil shops tighten, supply in the United States is ample, thanks to rising harvest.
U.S. crude production hit a record 11.1 million bpd in the week ending Sept. 21, harmonizing to data from the Energy Information Administration (EIA).
That’s an increase of practically a third since mid-2016.
Commercial crude stocks rose by 1.85 million barrels, to 395.99 million barrels, the EIA observations showed.