Oil prices reach four-year high ahead of USA sanctions on Iran

The potential supply shortage is a a reversal of the glut seen in the oil market between 2015 to 2017

This week, oil prices rose above $82 per barrel for the first time since 2014 as Iran is losing its crude exports ahead of Trump's sanctions against it oil sector coming into force early November.

Meanwhile, the US West Texas Intermediate (WTI) crude futures were also up by USD$1.66, or 2.3 percent, putting a hefty USD$74.91 per barrel price - the company's highest since July. WTI has risen around 18% since mid-August.

Global benchmark Brent crude futures for December delivery dropped 0.6 percent to $84.43 per barrel, hovering just below its highest since November 2014 of $85.45-peak hit on Monday.

In line with Reuters' survey, Bloomberg also reported that the OPEC production was expected to rise by only 30,000 barrels per day in September as the majority of the increase was offset by a 140,000 bpd fall in Iran's production.

Donald Trump spoke on the phone Saturday with King Salman bin Abdulaziz of Saudi Arabia, days after the US president's latest criticism of OPEC.

Jabouley said at current price, oil producers will start to pump up their production capacity and flood the market with the commodity.

Sentiments picked up after the U.S. and Canada reached a new deal to renew the North American Free Trade Agreement (NAFTA), saving a $1.2 trillion per year open-trade zone that had been on the verge of collapse.

Brent sweet crude oil futures rose to as much as 83.27 dollars a barrel.

As of the moment, the market's focus is on the looming sanctions of Washington on Iran, which is slated to take a full swing by November 4 this year. In May, Iran sold 2.71 million bpd overseas, almost three percent of daily global oil consumption. With sanctions due to resume on November 4, the sharp drop-off in supply from the Persian Gulf state has helped buoy crude oil prices. China's Sinopec said it halved loadings of Iranian oil in September.

The Nigerian government has pegged crude oil price at $51 per barrel in the 2018 budget with a daily production of 2.3 million per barrel per day.

"Until sizable supply is offered up by OPEC, ultimately traders will continue to push the envelope even more", said Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore.

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