Oil jumps as market tightens, more gains seen

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"We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices!".

Suhail bin Mohammed Faraj Faris Al Mazrouei, Minister of Energy and Industry, said as the market is right now in "good condition", the Emirate would not overuse its spare production capacity.

In addition to US sanctions cutting Iranian supply, the world is also dealing with a decline in Venezuelan oil production due to an economic crisis in the Latin American nation, according to Trafigura's Luckock.

Tehran had previously said no OPEC member was allowed to grab market share from rivals, such as Venezuela or Libya, whose production had declined due to unrest or a lack of investment.

The Organisation of the Petroleum Exporting Countries and non-OPEC states, including top producer Russian Federation, gathered in Algiers on Sunday for a meeting that ended with no formal recommendation for any additional supply boost to counter falling supply from Iran.

They have reportedly been discussing raising output by half a million barrels a day to counter falling supply from Iran. Trafigura co-head of oil trading Ben Luckock said at APPEC that he sees US$90 oil by Christmas and US$100 in early 2019.

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"Fears that supply will be hit when the United States sanctions on Iran kick in come November are pushing up oil prices".

The decision not to urgently increase output was in effect a snub to Trump, who has been persistently calling for action to cool the market.

Benchmark Brent oil LCOc1 reached $80 a barrel this month, prompting Trump to reiterate on Thursday his demand that the Organization of the Petroleum Exporting Countries lower prices. However, the consensus has now moved to as much as 1.5 million barrels daily as the U.S.is "incredibly serious" about its measures, he said. The biggest source of new global supply, USA shale, is also experiencing growing pains as pipeline bottlenecks and workforce issues hamper growth.

Mr Trump said last week that OPEC "must get prices down". "The reason Saudi Arabia didn't increase more is because all of our customers are receiving all of the barrels they want".

Looking ahead, crude oil prices await the release of US Energy Information Administration and Department of Energy inventory figures later this week.

One problem is the uncertainty over how much oil will be lost when the USA -led sanctions against Iran begin in November.

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