Oil prices set for sixth week of gains, India sounds
alarm
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[May 18, 2018]
By Ahmad Ghaddar
LONDON (Reuters) - Brent oil prices rose on
Friday and were set for a sixth straight week of gains, boosted by
strong demand, looming sanctions on Iran, plummeting Venezuelan
production and Nigerian disruptions, as Saudi Arabia moved to assuage
supply concerns.
Brent crude futures <LCOc1> were at $79.69 a barrel at 0913 GMT, up 39
cents. The international benchmark broke through $80 for the first time
since November 2014 on Thursday.
U.S. West Texas Intermediate crude futures were at $71.63 a barrel, up
14 cents and set for a third straight week of increase.
British bank Barclays said it expected average prices of $70 per barrel
for Brent this year and $65 a barrel for 2019, up from estimates of $63
and $60 previously.
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"Since last month, Venezuela's production decline, Trump's Iran
sanctions decision, a new disruption in Nigeria, and anecdotal evidence
from a new round of producer earnings require a price forecast
revision," the bank said.
Rising prices have already raised the alarm among big oil-consuming
countries.
OPEC kingpin Saudi Arabia said on Thursday it would make sure the world
is adequately supplied with oil just as major consumer India expressed
frustration with rising prices.
Saudi Energy Minister Khalid al-Falih called India's Petroleum Minister
Dharmendra Pradhan to assure him that supporting global economic growth
was "one of the kingdom's key goals", the Saudi ministry said.
Crude prices have received broad support from voluntary supply cuts led
by the Organization of the Petroleum Exporting Countries.
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![](../images/051818pics/busine44.jpg)
A general view of the Centenario deep-water oil platform in the Gulf
of Mexico off the coast of Veracruz, Mexico January 17, 2014.
REUTERS/Henry Romero/File Photo
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The International Energy Agency said oil inventories in the developed world had
already dipped below the five-year average, a measure targeted by OPEC and its
allies.
Beyond OPEC's cuts, strong demand, falling output from Venezuela and a U.S.
announcement this month that it would renew sanctions against OPEC member Iran
have helped push up Brent by 20 percent since the start of the year.
U.S. investment bank Jefferies said sanctions against Iran could remove more
than 1 million barrels per day (bpd) from the market.
Barclays said output from Venezuela could fall below 1 million bpd. The country,
also an OPEC member, produced around 1.5 million bpd in April. <PRODN-VE>
In Nigeria, Shell <RDSa.L> declared force majeure on Thursday on loadings of
Bonny Light crude. Exports of the grade were expected to run at nearly 200,000
bpd in June. Nigeria's Forcados stream was also experiencing delays due to a
pipeline leak.
To view a graphic on Asia's oil thirst being expensive, click: https://reut.rs/2wLchCf
To view a graphic on Russia vs Saudi vs U.S. oil production, click: https://reut.rs/2rNTili
(Additional reporting by Henning Gloystein; Editing by Dale Hudson)
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