Oil futures reached a high of 2019 on Tuesday, Apr. 2nd under the prospect that more sanctions against Iran and more supply disruptions in Venezuela could intensify OPEC-led supply cuts, raising expectations that Brent prices could surpass $ 70 per barrel soon.
The United States is considering further sanctions against Iran, whose oil exports have been cut by half by existing measures, an official said. A major oil terminal in Venezuela, which is also under US sanctions, has suspended operations again.
“The price level of $ 70 per barrel is strikingly close,” said Norbert Ruecker, an analyst at Swiss bank Julius Baer, adding that the market is unlikely to move permanently above that level.
“Any further increase in the price of oil will begin to have more damaging economic consequences for most emerging markets.”
Other supply losses from Iran and Venezuela could lift the OPEC-led production cut, which came into effect in January, designed to prevent an increase in inventories.
The offer by the Organization of the Petroleum Exporting Countries hit a four-year low in March, according to a Reuters poll, as Saudi Arabia cut more than it had set in the agreement and due to involuntary cuts.