Crude climbed to $80 a barrel in London for the first time since May amid signs that global supplies are shrinking.
Brent futures rose as much as 1.4 percent on Wednesday, while the US crude benchmark added as much as 2.9 percent. US efforts to isolate Iran have disrupted shipments from OPEC’s No. 3 supplier at the same time that American crude stockpiles dwindled to a 3 1/2-year low. Meanwhile, Hurricane Florence threatened East Coast fuel markets.
“What you’re seeing is a tightening inventory picture from the Iranian sanctions globally,” said Nick Holmes, an analyst at Tortoise in Leawood, Kansas, which manages $16 billion in energy-related assets.
As investors assessed the impact of Iranian sanctions, the unanswered question
is whether mega-producers Saudi Arabia and Russia will jump in to fill supply gaps. Russia said it has the capacity to set a new oil-production record but won’t decide whether the market needs those additional supplies before a meeting later this month with its OPEC allies.