Oil prices hit four-year-high of $81 amid looming Iran sanctions

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Focus turns on release of US API crude stocks report later today and EIA US crude inventories on Wednesday, for fresh signals, as the latest report showed US oil Inventories at record lows and further boosted oil prices.

As new USA sanctions against Iran come into force on November 4, importers would find it harder to buy oil from Tehran.

An oil price spike is starting to look increasingly possible, with a rerun of 2008 not entirely out of the question, according to a new report.

Members of the Organisation of the Petroleum Exporting Countries (OPEC) and non-members have confirmed their intention to continue work to strengthen the stability of the world oil markets in light of the agreement reached in 2016.

OPEC and its partners gave a tepid response to President Donald Trump's demand that rapid action be taken to reduce prices, saying they would boost output only if customers want more cargoes.

"We don't believe OPEC can actually raise output significantly in the near term, as the physical spare capacity in the system is not that high", Kelty said.

"Since June, Saudi Arabia has met the demand for every barrel that has been requested", the Saudi oil minister, Khalid al-Falih, said at a news conference after the meeting, the New York Times reported.

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Major oil trading houses are predicting the return of US$100 crude for the first time since 2014 as OPEC and its allies struggle to compensate for USA sanctions on Iran's exports. That was the highest level since November 12, 2014.

Saudi Arabia dominates the OPEC group of oil-producing nations and Russian Federation is its biggest oil-producer ally outside the group.

The Joint OPEC-non-OPEC Ministerial Monitoring Committee (JMMC) convened in Algiers, for its tenth meeting, said that the despite the growing uncertainties surrounding market fundamentals, the 25 producing countries continue to seek a "balanced" and sustainably "stable" global oil market. The choking of the flow of oil from Iran comes at a time when threats of supply disruptions in Venezuela, Libya and Nigeria have increased as well.

That effectively means compensating for falling Iranian production.

He added that Saudi Arabia can increase output by 1.5 million barrels per day. Oil demand is forecast to increase by 14.5 million barrels a day to a total of 111.7 million barrels in 2040, driven by an expanding middle class and economic growth in developing countries. However, analysts say that it is unlikely that the Kingdom will manage to bring this production to market quickly enough, and it will have difficulties in maintaining that level of production.

However, many industry executives maintained a cautious stance as OPEC may struggle to fully make up for the potential loss of Iranian barrels in the global market over the coming months, if not years.

To reflect rising USA oil exports, CME Group Inc (CME.O) said on Monday it will launch a WTI Houston crude futures contract in the fourth quarter.

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