Singapore — Crude oil futures were higher by more than $1/b during mid-afternoon trade in Asia Monday, with ICE Brent crude crossing the $80/b mark on intensifying geopolitical tensions between the US and Venezuela, and a marginal fall in the US oil rig count.
This came as Saudi Arabia reiterated at the OPEC/non-OPEC monitoring committee meeting over the weekend in Algiers that the oil market is balanced, and is willing to produce more crude to mitigate supply risks ahead.
At 1:45 pm Singapore time (0545 GMT), ICE November Brent crude futures rose $1.27/b (1.61%) from Friday's settle to $80.07/b, while the NYMEX November light sweet crude contract was $1.06/b (1.50%) higher at $71.84/b.
The last time the front-month ICE Brent futures contract crossed $80/b during intraday trading session was in late May, data from S&P Global Platts showed.
The US Administration on Friday indicated its readiness to ramp up sanctions on the Maduro regime in Venezuela, which could potentially impact imports of US light oil and refined products by Venezuela, analysts said.
Meanwhile, the oil market is balanced, Saudi energy minister Khalid al-Falih said Sunday, thanks to efforts by OPEC and its partners in boosting production the last few months.
"Whatever takes place between now and the end of the year in terms of supply changes will be addressed," he told reporters. "The market is reasonably steady, and we should just be dynamic and responsive and responsible."
Further output increases could come, he suggested at the OPEC/non-OPEC monitoring committee meeting, though he declined to commit to any explicit volumes nor any firm timeline.
"OPEC and members look poised to reach a decision in December 2018 as they monitor the effects of US sanctions and a potential decline in Iranian production," said Benjamin Lu, investment analyst at Philip Futures.
Iran is expected to lose a significant chunk of its production as US sanctions go into force November 5, while economically reeling Venezuela and unstable Libya also present supply risks.
"We opine that OPEC+ will take carefully calibrate and take a gradual approach in increasing production to prevent for an imbalance in supply side fundamentals into 2018. Oil prices as such remain inclined towards the upside as supply side weakness and risks loom large," he added.
The monitoring committee will meet again November 11 in Abu Dhabi to assess market conditions ahead of OPEC's next full meeting in Vienna, now scheduled for December 6, when any policy changes would be decided. Non-OPEC members of the coalition will join the talks December 7.
Falih also responded to US President Donald Trump's tweet late last week that OPEC was conspiring to keep prices high.
Falih said Trump's accusations were "of course not true."
UAE energy minister Suhail al-Mazrouei, speaking to reporters at the meeting at Algiers reiterated OPEC's stance that it does not target a specific oil price.
"We are not concerned by external pressures," he told reporters. "We are an organization concerned with market equilibrium and not a political organization."
Elsewhere, total US oil rigs edged lower by one last week to 866, data from Baker Hughes report released Friday showed.
As of 0545 GMT, the US Dollar Index was up 0.07% at 93.86.
