Oil jumps, then pares gains as Trump pressures Opec again

The updated report comes as U.S. President Donald Trump and Iranian President Hassan Rouhani exchanged taunts at the United Nations General Assembly on Tuesday.

Brent crude futures settled up 67 cents at US$81.87 a barrel.

Brent crude prices rose to a almost four-year high above above $82 a barrel on Tuesday after OPEC and its allies said they would stick to the plan they agreed to in June. United States crude futures rose 20 cents to US$72.28 a barrel, close to the highest since mid-July.

At the same time, the demand worldwide is reaching 100 million barrels per day for the first time in history.

"This is the oil market's response to the OPEC and allies' refusal to step up its oil production", said Carsten Fritsch, commodities analyst at Commerzbank in Frankfurt.

Earlier on Monday, Oil prices rose by nearly 2 percent as the US sanctions restricted Iranian crude exports, which helped tighten the total global supply.

Global benchmark Brent is on course for its fifth consecutive quarterly increase, the longest stretch since early 2007, when a six-quarter run led to a record high of US$147.50 a barrel.

It's unclear, however, how much other countries will follow suit once a second set of sanctions targeting Iran's oil sector take effect on 4 November. Meanwhile, the European Union announced a plan to continue buying Iranian crude via a special-purpose vehicle for barter transactions.

It could cause Washington to take extraordinary steps, including the use of the Strategic Petroleum Reserve, to cool down the crude oil and other fuel prices ahead of the USA mid-term elections.

In a Tuesday speech at the U.N., Trump reiterated calls on OPEC to pump more oil, accused Iran of sowing chaos and promised further sanctions on the country.

The so-called "Opec+" group, which includes Russia, Oman and Kazakhstan, met over the weekend to discuss a possible increase in crude output, but the group was in no rush to do so.

"If he wants the price of oil not to go up and the market not to get destabilised, he should stop unwarranted and disruptive interference in the Middle East and not be an obstacle to the production and export of Iran's oil".

USA officials, including President Donald Trump, are trying to reassure consumers and investors that enough supply will remain in the oil market and have pushed OPEC to raise output.

  • Wendy Palmer