Oil price races towards $80 amid strong demand

Brent oil price crossed the barrier of 75 USD per barrel

Brent oil price crossed the barrier of 75 USD per barrel

NEW YORK, April 24 (Reuters) - Oil prices were little changed on Tuesday after Brent hit its highest level since November 2014, supported by strong demand, OPEC-led production cuts, and the prospect of renewed USA sanctions on Iran.

The prospect of fresh sanctions on Tehran and disruption to the country's oil flows has helped push the oil price to its highest since late 2014 this month.

Donald Trump has doubts about the extension of the "nuclear deal" with Iran at the time when Saudi Arabia has been speculating on the bull market, Venezuela has been cutting its oil production, the situation in Syria and in the Middle East in general has been exacerbating.

Brent, the global benchmark, surged as high as $75.27 a barrel overnight - a level not seen since 2014. And with demand for oil only growing, it is going to cause oil prices to skyrocket.

Additionally, the cut in production by Russian Federation and The Organization of the Petroleum Exporting Countries (OPEC), coupled with robust oil demand growth, have also virtually eliminated the global oil glut that worked to push down prices. But lower oil prices could also mean less production in the USA, which would offset some of the increase in OPEC production.

With the global economy on a cyclical upswing, how the battle between the price and income effects on oil consumption plays out is crucial, analysts said. "That seemed to take crude oil and other commodities down with it", said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund, referring to selloff in the morning.

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Crude oil futures reversed course Tuesday, unable to extend 4-year highs as US stocks were hammered. "No good and will not be accepted!".

"Oil prices are artificially Very High!"

Hansen said Washington looks increasingly likely to re-introduce sanctions against Iran on May 12, something that could hurt its ability to produce and export crude oil.

One of the factors limiting the oil rally is rising USA production.

The latest USA inventory figures are expected to show a 2.6-million-barrel drop in crude stocks. The blend is now more than double the price reached in early 2016 when global economic concerns were at their worst. However, according to Bloomberg, these prices are a result of demand. That's been credited with pulling oil from below $30 per barrel, but it's offset by US gains.

It's certainly possible that President Trump will put more pressure on OPEC producers if oil prices keep rising. It is entirely possible gasoline prices this year could surpass that to a four-year high this summer.

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