Brent oil prices near November 2014 highs ahead of U.S. sanctions against Iran

By Henning Gloystein

SINGAPORE (Reuters) – Oil prices edged up on Tuesday, holding near a four-year high reached the previous day as markets adjust to the prospect of tighter supply once the U.S. sanctions against Iran kick in next month.

Brent crude oil futures () were trading at $85.05 per barrel at 0104 GMT, up 7 cents, or 0.1 percent, from their last close. That kept Brent near the $85.45 peak reached the previous session, its highest since November 2014.

Brent has risen by around 20 percent from their most recent lows in August.

U.S. West Texas Intermediate (WTI) crude futures () were up 25 cents, or 0.3 percent, at $75.55 a barrel.

WTI is up by almost 18 percent since mid-August.

Market sentiment was lifted by a last-gasp deal to salvage NAFTA as a trilateral pact between the United States, Mexico and Canada, rescuing a $1.2 trillion a year open-trade zone that had been about to collapse.

More fundamentally, oil markets have been pushed up by looming U.S. sanctions against Iran’s oil industry, which at its most recent peak this year supplied almost 3 percent of the world’s almost 100 million barrels of daily consumption.

Washington’s sanctions are set to start on Nov. 4, and analysts say there may not be enough spare production capacity in the short-term to meet demand, potentially requiring large storage drawdowns.

“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.

The Organization of the Petroleum Exporting Countries (OPEC), of which Iran is a member, has struggled to replace export falls from Iran, according to a Reuters survey published on Monday.

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