Oil rose on Friday amid growing signs of a global supply deficit, with the global benchmark for prices notching a fifth straight quarter of gains and a fresh multiyear high.
Brent crude added $1, or 1.2%, to $82.72 a barrel on London’s Intercontinental Exchange to post its longest streak of consecutive quarterly advances since 2008. On the New York Mercantile Exchange, light, sweet crude for November delivery climbed $1.13, or 1.6%, to $73.25 a barrel, ending the quarter 1.2% below its June peak.
Overall, the market has been bolstered recently by declining Iranian crude exports ahead of U.S. economic sanctions against the Islamic Republic’s oil industry, set to take effect Nov. 4.
“Iranian oil exports are falling faster than expected,” said Giovanni Staunovo, commodity analyst at UBS Wealth Management.
Officials at the state-run National Iranian Oil Co. have said they provisionally expect crude shipments to have dropped to about 1.5 million barrels a day this month, compared with 2.3 million barrels a day in June, according to people familiar with the matter.
The Pardis petrochemical complex facilities in Assalouyeh, Iran, where oil exports are expected to have fallen this month in anticipation of the reimposition of U.S. sanctions. Photo: /Associated Press
President Trump in May pulled the U.S. out of a 2015 international agreement to curb Iran’s nuclear program, setting the stage for the reimposition of economic sanctions.
At the same time, the oil rally was reignited earlier this week because the U.S. “is not planning to tap its strategic oil reserves and Saudi Arabia is taking a rather passive approach” to filling the gap left by the Iranian shortfall, Mr. Staunovo explained.
The Organization of the Petroleum Exporting Countries—de facto under Saudi Arabia’s leadership—and its production allies, including Russia, agreed at a meeting in Algiers on Sunday to adhere to current production quotas first implemented at the start of 2017. That means continuing a gradual ramp up in production the suppliers had agreed to at the start of the summer in an effort to bring down overcompliance with the initial agreement.
But the producers declined to announce specific plans to raise production further, as many analysts had anticipated, seemingly defying calls by Mr. Trump for the cartel to increase output to put a cap on prices. That decision sent Brent soaring Monday back above $80 and to its highest level since November 2014.
Now, the “ascent in oil prices shows few signs of capitulating,” said Stephen Brennock, analyst at brokerage PVM Oil Associates Ltd.
Among refined products Friday, gasoline futures edged up 1.88 cents, or 0.9%, to $2.1012 a gallon. Diesel futures added 2.87 cents, or 1.2%, to $2.3518 a gallon.