Investing.com - OPEC’s dismissal of Donald Trump’s demand for higher oil supplies bolstered crude markets on Monday, with UK Brent hitting four-year highs and West Texas Intermediate a July peak as traders feared global inventories were inadequate to match demand.
Crude prices settled broadly higher by about 2% after the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC states, including top producer Russia, ended a meeting in Algiers on Sunday without a formal recommendation for a supply boost to counter falling oil exports from Iran.
Brent oil futures for November for settled up 3% at $81.20 a barrel after hitting $81.39, the highest level since November 2014.
WTI futures for November settled up 1.8%,at $72.08, soaring to $72.74 earlier, its highest since the week ended July 8.
Oil has rallied the past two weeks on worries about Trump’s plans to bring Iranian crude shipments to zero through sanctions slated for Nov. 4. But the president has also been sending mixed signals to the market by calling on OPEC to put a lid on the market’s rally, saying he would sell supplies from the U.S. Strategic Petroleum Reserve, if necessary, to curb rising prices at the pump.
Khalid al-Falih, energy minister of Saudi Arabia, the kingpin of OPEC, rebuffed Trump’s calls on Sunday, saying: “I do not influence prices.”
“The real reason they refused to increase could be that they don’t have enough spare capacity to bring on line quickly,” Phil Flynn, energy analyst at Price Futures Group in Chicago, said, referring to the OPEC decision.
Iran's OPEC governor Hossein Kazempour Ardebili was quoted by Reuters as saying that Saudi Arabia and Russia “got prices higher and they are going to get them higher still" and “cannot deliver the extra capacity that they claim”.
Monday’s price gains weren’t disrupted by an industry estimate of higher crude inventories at the Cushing, Okla. delivery point for WTI futures. Market intelligence firm Genscape estimated a 530,860-barrel build at Cushing for last week, traders who saw the data said. That compares with a rise of just 22,333 barrels for the week to Sept. 14 reported by the U.S. Energy Information Administration.
Data showing little change in U.S. oil drilling activity last week also bolstered prices, with the domestic oil rig count falling by just 1 to 866.
In other energy trading, gasoline RBOB futures rose 4 cents to $2.0421 per gallon, while heating oil rose 5.96 cents to $2.29 a gallon. Natural gas futures gained 5.5 cents to $3.029 per million British thermal units.