LONDON. — Brent oil prices eased modestly yesterday but stayed near their highest level this year, supported by concerns that producers may fail to cover a supply shortfall once US sanctions on Iran come into force in November.
Brent LCOc1, the global oil benchmark, slipped 18 cents to $78,85 a barrel by 1336 GMT, after Tuesday’s 1,3 percent rise on a media report that Saudi Arabia, the world’s largest oil exporter, was comfortable with prices above $80.
ANZ bank said in a note that investors took the report that cited unnamed sources as a signal Riyadh “won’t be aggressively responding to the rise in prices with supply increases”.
Consultant JBC Energy cautioned against reading too much into the report. “It may well be that too much attention is being put on these indirect anonymous statements,” it said.
US crude prices CLc1 were last up 28 cents at $70,13.
Reuters reported on 5 September that Saudi Arabia wanted oil to stay between $70 and $80 a barrel to keep a balance between maximising revenue and keeping a lid on prices until US congressional elections.
The focus on oil supply has been reflected in the options market this week, where investors have scooped up large amounts of buy or call options, suggesting they see prices rising.
Data from the Inter-Continental Exchange shows open interest in calls that give the owner the right to buy Brent futures at $80 and $85 by next week grew by nearly 45 percent on Monday and Tuesday to an equivalent of 54 million barrels of oil.
The Organisation of the Petroleum Exporting Countries and other producers including Russia meet on 23 September in Algeria to discuss how to allocate supply increases within their quota framework to offset the loss of Iranian supply.