• News
  • Money

Oil at $100 is a possibility next year, Bank of America says

Oil at $100 is a possibility next year, Bank of America says

Iranian Oil Minister Bijan Namdar Zanganeh said Donald Trump's decision on abandoning the nuclear deal is not going to have a great impact on Iran's oil, gas and gas condensate exports and revenue, IRIB reported on Friday. If history is any guide, there is little chance of this happening, so we are now on a course of escalating confrontation.

He also announced the USA will re-impose sanctions against Iran, which will be rolled out in keeping with 90 day and 180 day wind-down periods. However, there is a great deal of disagreement and uncertainty over how quickly and how severely the impact of US confrontation will be.

Oil prices steadied near 3-1/2 year highs on Friday as the prospect of new US sanctions on Iran tightened the outlook for Middle East supply at a time when global crude production is only just keeping pace with rising demand. The EU, China and Russian Federation have said they are sticking with the deal.

"It is not yet clear which concrete sanctions the US will impose". The EU has vowed to protect its companies, and could even pursue trade retaliation if the U.S. Treasury moves to penalize European companies. "While prices are now rising on Trump's decision to reimpose sanctions on Iran, we may see some limitations to the rally as any lost volumes can be supplied by other producing nations".

Just how much of Iran's growth in oil production is at risk - and when it could decline - is uncertain.

Iran produced about 3.8 million barrels of oil per day in April, according to the latest S&P Global Platts OPEC survey. Disruption in a commodity-importing region such as Asia threatens to drag down other emerging market regions with it. A 20 percent reduction was an unofficial rule of thumb during the Obama era.

The global oil market is finely balanced, with top exporter Saudi Arabia and No.1 producer Russian Federation having led efforts to curb oil supply to prop up prices.

"If a new Iran deal is not reached in the next six months or OPEC/Russia extend production cuts into 2019, global oil markets would likely tighten further", the report said. This is unlikely to happen this time around as the United States has revoked the deal unilaterally and against the will of most other countries.

Niels Christensen: Saudi Arabia said earlier this year that they would be pleased to see oil prices above $80 towards $100, and they have also been indicating that they are not going to change the re-agreement amongst the OPEC countries about production cuts, that is running until the end of the year and everybody expects that deal with Russian Federation and also other non-OPEC countries to continue into 2019, so that will also be a factor supporting the oil prices.

Barclays does not see a significant impact on the oil market either.

OPEC kingpin Saudi Arabia indicated it was ready to act.

A lot depends on what Iran does next. "Importantly, Iranian compliance with its JCPOA obligations may potentially help it find alternative routes to export crude oil to worldwide markets", Barclays says.

The official further noted that Iran's oil industry has gone through massive changes through years and it can not be compared with 20 years ago.

Other major producers could fill the hole left by Iran. "The major concern in Tehran is not around volumes of crude that it could sell - not in the short to medium term at any rate - but over transfer of payments for those volumes", according to Argus Media.

Investment bank Goldman Sachs said in a note that Trump's announcement brought upside risks to its forecast that Brent crude will hit $82.50 a barrel by the summer.

Wall Street stocks rose Wednesday, with energy shares boosted by higher oil prices and banking shares advancing on expectations of increased interest rates.

Leave Your Comment

Leave Your Comment


Latest News

Breaking News



Recommended

Woman sends man 65000 text messages after one date

Some of the messages were threatening. " Id wanna bathe in it " and "I hope you die. you rotten filthy Jew". She wrote to object that if he tries to stop her, Ades will kill him and "drink the blood".

Google promises human-fooling AI 'will warn people that it is fake'

Like with anything involving Google, you send a tiny bit of yourself or your information when you interact with its products. Germick did agree, however, that Google's aim was to make the assistant human enough to keep users engaged.

IPL 2018: Match 43, Rajasthan Royals vs Chennai Super Kings - Statistical Highlights

Looking ar CSK side, the team are closer to seal their place in the play-offs and victory in Jaipur will secure them the ticket. Ajinkya Rahane also reiterated their intention behind wearing the jersey during the toss at the beginning of the match.

ISRAEL ON EDGE: Protesters Gather at Israel-Gaza Border

Yehiyeh Sinwar said the crowds will be unarmed, peaceful but "like a starving tiger" in pent-up anger and unpredictability. The Israeli and Egyptian governments enacted the blockade in 2007 after Islamic militant organizations overran the region.

Moscow says it won't supply advanced air defenses to Syria

Kozhin's comments come a day after Israel destroyed many of Syria's defenses, as it bombed Iranian targets within Syria. Syria now relies on a mixture of less advanced Russian-made anti-aircraft systems to defend its air space.

Here's ESPN's New 'Monday Night Football' Crew; Jason Witten Features

McFarland is also making a jump from college football coverage, previously serving as a studio analyst. Witten surprised his former team by retiring this offseason to take the TV role.

Kelly Assailed For Saying Immigrants 'Don't Integrate Well, Don't Have Skills'

They're not MS-13", he said. "They don't integrate well; they don't have skills", he claimed. He said he sympathizes with those who want to come to the US but that "laws are laws".

Iran warns of reprisal if USA doesn't compensate

Federica Mogherini, EU foreign policy chief, on Tuesday called on the worldwide community to stick to the 2015 nuclear deal.

Rockets set to host Warriors in Western Conference Finals

Game 6 of that series, if necessary, would be Friday in Philadelphia, with a potential Game 7 scheduled for Sunday back in Boston. But we calculated it - it's like 90 percent if we're gonna win a title, we've gotta obviously beat the Warriors at some point.

Golden State Killer Suspect Charged in 4 Goleta Cold-Case Murders

The 72-year-old suspect was previously charged with eight other counts of murder in Sacramento, Ventura and Orange counties. Investigators said the Golden State Killer found Offerman and Manning in bed before tying them both up and shooting them.