Oil traders prepare for $100 per barrel price tag

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The global benchmark crude traded at a $9.45 premium to WTI for the same month.

Global benchmark Brent crude oil futures were at $85.03 per barrel at 0439 GMT, up 5 cents from their last close, and not far off the $85.45 peak reached in the previous session, the highest since November 2014. The world now consumes about 100 million barrels a day of oil despite worries that electric cars and a rising trend toward renewable energy sources might one day reduce oil consumption.

At its 2018 peak in May, Iran exported 2.71 million bpd, almost 3 percent of daily global crude consumption.

"Fundamentally, we all felt that a lot of these things are driven not really by production and demand". Predictions for how much of Iran's 2 million bpd of exports will be lost to USA sanctions range from half a million bpd to 2 million bpd, or most of it's exports.

Global benchmark Brent crude traded at around $83.01 on Monday, up around 0.34 percent, while US West Texas Intermediate (WTI) stood at around $73.42, more than 0.2 percent higher.

"If you look at the prices charged by OPEC for Eastern Asia and Europe and United States, they are different". U.S Energy Secretary Rick Perry has ruled out using US strategic crude reserves to lower oil prices.

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"The camp of believers that $100 oil could be reached continues to expand, with spare capacity concerns continuing to grow", said Brian Kessens, managing director at investment services firm Tortoise.

But Brent spot prices have climbed by more than $12 per barrel (17 percent) since mid-August while the six-month calendar spread has risen nearly $2.60 and swung from contango into a pronounced backwardation. Meanwhile, the number of working oil rigs in the United States dropped for a second week, signalling that American output may also be slowing. Working oil rigs dropped by three to 863 last week, according to Baker Hughes data Friday. Analysts see those pipeline bottlenecks as a big threat against production growth of the Permian Basin, locate in the region of western Texas and southeastern New Mexico. The companies need to find ways to export more of the US light-sweet crude oil.

In the last few weeks, however, oil prices have been climbing, with the gains attributable a number of factors, according to Jeff Klearman, portfolio manager at GraniteShares, a New York-based exchange-traded fund issuer.

WTI is up by about 17 percent since mid-August. As a result, more USA crude oil would be shipped to Asian market.

"I think the NAFTA 2.0 deal helps prices - it takes away from some of the concerns that the trade war was going to impact growth", said Phil Flynn, an analyst at Price Futures Group in Chicago.

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