Skip to main content
Romanian Market News Banner

   .BUSINESS    .FINANCE    .INVESTMENTS    .STOCK EX    .COMPANIES    .LEGAL & TAX 


 

Brent climbs towards $80 a barrel to reach highest point since 2014

posted onMay 17, 2018
nocomment

Brent crude climbed near $80 a barrel on Thursday, a level it has not seen since November 2014, on heightened political risks in the Middle East following unrest in Gaza and the return of U.S. sanctions against Iran. 

Brent crude futures rose 4 cents to $79.32 a barrel at 0027 GMT while U.S. West Texas Intermediate (WTI) crude futures were 19 cents higher  at $71.68 a barrel, up 0.3 percent, from their last settlement as supplies tighten while demand remains strong. 

Brent was "now threatening to break through $80 per barrel ... (as) geopolitical risks continue to support prices, (and) an unexpected fall in inventories in the U.S. got investors excited yesterday" the news agency quoted ANZ bank as saying.

Earlier this month, the International Energy Agency warned “The restoration of sanctions on Iran, which exports 2.5 million barrels of oil a day and is the world’s fifth-largest exporter, may have implications for the market balance.”

Several banks have in recent days raised their oil price forecasts due to tighter supplies and a steady increase in demand. Morgan Stanley said it had raised its Brent price forecast to $90 per barrel by 2020.

France’s Total SA, one of the seven "Supermajor"oil companies in the world, on Wednesday warned it might abandon a multi-billion-dollar gas project in Iran if it doesn't obtain legal assurances from the United States, "with the support of the French and European authorities."

Danish shipping group, Maersk Tankers, also said that it would cease its activities in the Islamic Republic following Washington’s decision to leave the nuclear deal.

Iran South Pars Gas Field

After spending €40 million on the South Pars 11, Total dedicated to the supply of domestic gas to the Iranian market, the company said it would be forced to abandon the project before November 4.

"In these circumstances, Total will not take any further commitment related to the SP11 project and, in accordance with its contractual commitments vis à vis the Iranian authorities, is engaging with the French and US authorities to examine the possibility of a project waiver," Total said in a statement.

The company explained that it wouldn't be able to put to risk its  financing in dollars by US banks, operations in the country and US shareholders.

US banks are involved in more than 90% of Total’s financing operations, US shareholders represent more than 30% of Total’s shareholding and US assets represent more than 10 billion dollars of capital employed. 

South Pars, located in the Persian Gulf, is the largest gas field in the world. According to the International Energy Agency (IEA), the field holds an estimated 1,800 trillion cubic feet (51 trillion cubic metres) of in-situ natural gas and some 50 billion barrels (7.9 billion cubic metres) of natural gas condensates.

The joint venture in phase 11 includes PetroChina via a contract signed by its parent China National Petroleum Corp., or CNPC. Total confirms that a withdrawal from SP11 would not impact its production growth target of 5% CAGR between 2016 and 2022. 

Meanwhile, Iranian Oil Minister Bijan Zanganeh has said CNPC, is ready to take the place of Total on the major gas field project if the French energy giant pulls out. “Under the prerequisite of not violating its international obligations, the Chinese side will continue to carry out normal and transparent practical cooperation with Iran,” Press TV quoted Chinese Foreign Ministry spokesman, Geng Shuang as saying.