LAHORE: Oil prices hit a fresh 3-year high on Thursday ahead of a United States’ (US) decision on whether to extend temporary waivers on sanctions against Iran.
US President Donald Trump is set to review whether to waive or re-impose sanctions on Iran this week, a decision that has implications on Iran’s oil exports. “It will be very important for the oil market to see what President Trump does with Iran considering that in the past due to sanctions regime a large portion of exports was disrupted,” said UBS Wealth Management Commodity Analyst Giovanni Staunovo.
Staunovo added that oil prices were rising due to a combination of factors including geopolitical risks, falling output in Venezuela and shrinking inventories in the US. Earlier on Wednesday, the US Energy Information Administration reported that crude oil stocks fell by almost 5 million barrels in the week ended January 5, 2018.
Moreover, analysts at Citi believe that geopolitical risks such as global supply disruptions, particularly in Iran, Iraq, Libya, Nigeria and Venezuela, could send crude oil prices into the $ 70 to $ 80 range. Meanwhile, UAE has re-iterated that OPEC will stick with production cuts for the rest of the year as the group makes headway toward its goal of clearing an oversupply of crude oil.
