Investing.com - Oil prices rose on Tuesday morning in Asia after reaching an almost four-year high on closing during the previous session. The price hikes have been driven by expectations of a tighter supply of crude caused by U.S. sanctions against Iran that take effect in November, according to analysts.
On the New York Mercantile Exchange, Crude Oil WTI Futures for November delivery edged up 0.31% to $75.53 a barrel at 10:53PM ET (02:53 GMT). On London’s Intercontinental Exchange, Brent Oil Futures for December delivery advanced 0.05% to $85.02 per barrel.
Crude oil closed in New York on Monday at the highest level since November 2014, as oil exports from Iran dropped to the lowest in 2.5 years even before U.S. crude sanctions against the world’s fifth largest oil exporter kick in.
OPEC had a meeting in September during which members decided not to raise oil production, sending prices up.
Analysts said there might not be enough extra production capacity in the short-term to meet demand and that OPEC might struggle to meet the shortfalls.
“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 Tortoise.
One of the believers is Patrick Pouyanne, CEO of French oil producer Total SA (PA:TOTF), who said on a Bloomberg TV interview last week, “I’m not sure it’s a good news [for the global economy]. Even for the oil industry, because you know, when price goes too high, then you open the door to your competitors and demand will fall.”
Elsewhere, the number of rigs drillings for U.S. crude also fell a second week, indicating slow output growth. The number of onshore oil rigs dropped by three last week to 863, according to data from Baker Hughes released Friday.
The U.S. and Canada made a deal on Sunday to salvage the North American Free Trade Agreement, ensuring the continuation of a $1.2 trillion-a-year open-trade zone, lifting market sentiments and driving oil prices higher.