Oil prices surge past $80 per barrel as OPEC defy Trump demands

The price of Brent crude rose to US$81.42 a barrel last night – its highest level in four years – after OPEC leaders ruled out a production increase to buttress a tightening oil market.

With US sanctions on Iran’s oil market looming, president of commodity trading company Mercuria Daniel Jaeggi said around 2 million barrels per day (bpd) of crude could be taken off the market.

“We are on the verge of some significant volatility in the fourth quarter of 2018 because depending on the severity and duration of the Iranian sanctions, the market simply does not have an adequate supply response for a 2 million bpd disappearance of oil from the markets,” he said at the Asia Pacific Petroleum Conference.

Meanwhile, an industry meeting in Algiers between OPEC members and leading oil producers concluded with the cartel and its allies deciding to refrain from an urgent boost in output, despite US President Donald Trump’s recent demands to bring down oil prices.

In a tweet sent last week, the POTUS said: “The OPEC monopoly must get prices down now!” However, some analysts have predicted oil prices will continue to rise towards $100 per barrel in the coming months as the market enters a crucial phase.