Global oil markets have tightened over the last month, pushing up Brent prices by more than 10 percent since the middle of August.
"There has been incredible USA refinery demand, and there has been huge US driver demand for gasoline".
Oil prices rose on Monday, supported by concerns that falling Iranian output will tighten markets once US sanctions bite from November, but gains were limited by higher supply from OPEC and the United States. Investors anticipate less supply from Iran as USA sanctions on Tehran begin to bite.
Pair Iran with a booming US economy and soaring driver demand for gasoline, and Kilduff contended that Wall Street is coming up with a bullish scenario for crude that it hasn't had in years. Given the current upside momentum, this price level could easily be achieved later today especially if additional U.S. Gulf oil operations are shutdown once the hurricane's path and strength are determined.
Oil prices have stabilized over the last two years largely thanks to a deal between OPEC and non-OPEC oil producers, including Bahrain and Oman, to curb oil output.
In all, companies halted 156,907 barrels per day of oil production, according to estimates Tuesday by the U.S. Bureau of Safety and Environmental Enforcement.
Japan's major oil wholesalers are preparing to suspend crude oil imports from Iran in October, amid fears Washington will sanction countries importing Iranian crude, local media reported.
On Friday, WTI crude oil settled at $69.80 a barrel while ICE Brent crude closed at $77.42. In July, Japan lifted more than 183,000 barrels per day of Iranian oil, raising imports for the third consecutive month year on year.
WTI (oil futures on NYMEX) extended its corrective slide from eight-week tops of $ 71.39, now breaching the $ 69 level amid a renewed uptick in the U.S. dollar across its major peers. The shift comes as Iran's oil exports are shrinking, with key buyers in Asia taking fewer cargoes weeks before US-imposed sanctions take full effect.
The Chevron Pascagoula Refinery is pictured as Tropical Storm Gordon approaches Pascagoula, Mississippi, U.S., September 4, 2018.
Hedge funds' net-long position - the difference between bets on higher prices and wagers on a drop - in Brent rose to 389,066 contracts, ICE Futures Europe data show for the week ended August 28. The market will look to other producers such as Russian Federation to fill the void, even as Nigeria's oil minister remains confident of OPEC's ability to pump more, said the Singapore-based analyst.