Oil Rose Above $84, Despite Increase In Supply From the USA & Iran

The price of oil rose above $84 per barrel on Friday 29th October 2021, as presumptions that OPEC and its allies will keep supply compact countered rising supply in US inventories and export prospects in Iran.

Algeria stated on Thursday that output by OPEC+ must not exceed 400,000 barrels per day as a result of risks and market uncertainties in the oil market.

“Supply will therefore continue to play catch-up with demand in the immediate term,” said Stephen Brennock of oil broker PVM. “In short, OPEC+ is intent on continuing to act as a key pillar of price support.”

Brent crude rose 11 cents, or 0.1%, to $84.43 a barrel by 1213 GMT and U.S. West Texas Intermediate crude slipped 8 cents, or 0.1%, to $82.73. Both benchmarks touched multi-year highs on Monday.

Crude has surged in 2021 as economies recover from the COVID-19 pandemic, but prices are on track to fall this week, with Brent facing its first weekly decline in about two months.

This week’s U.S. inventory figures showed crude stocks rose by a more than expected 4.3 million barrels.

Iran, meanwhile, has said that talks on reviving the international deal on its nuclear programme will resume by the end of November, bringing it a step closer to boosting oil exports.

Carsten Fritsch. “The sharp rise in U.S. crude oil stocks and the expectation of nuclear talks being resumed with Iran have temporarily eased concerns about supply to some extent,”

The heat also came out of the rally because of easing concern over high coal and natural gas prices that have spurred fuel-switching in power generation.

British and European gas prices continued to fall on Friday after Russian President Vladimir Putin said Russia could start pumping gas into European storage.