The oil price is moving higher again Thursday after a minor dip earlier this week. Brent crude is edging towards $80 per barrel as US stockpiles fall and amid worries of potential oil supply disruptions from Venezuela and Iran.
By 1125 BST the price of Brent crude rose to $79.86 per barrel, around a three-and-a-half year high. The price of WTI crude, meanwhile, hit $72.10 per barrel.
US oil stocks shrink
The International Energy Agency said that US stocks of crude oil shrank 1.4 million barrels. That’s despite consistent increases in US production.
In addition, the IEA has cut its oil consumption forecasts as higher prices work to reduce future demand.
“Global oil demand growth for 2018 has been revised slightly downwards from 1.5 million barrels per day,” the IEA said int latest oil supply report.
“While recent data confirms strong growth in the first quarter 2018 and the start of the second quarter, we expect a slowdown in 2H18 largely attributable to higher oil prices. World oil demand is expected to average 99.2 million barrels per day in 2018,” the IEA said.
Iran, Venezuela supply worries
In the meantime, traders are continuing to focus on potential supply disruptions in Venezuela and Iran amid geopolitical concerns. Venezuela could also be hit with strict sanctions in the wake of its upcoming presidential elections.
“If there is a large shortfall in Iranian exports then clearly that will have an impact on a market that is already quite tight,” Neil Atkinson, head of the oil industry and markets at the IEA, told CNBC.
“And it's not beyond the realms of possibility that by the end of 2018, production in Venezuela could be several hundred thousand barrels lower than in its today. If that shortfall there coincides with a large shortfall in Iranian exports as the sanctions are implemented that potentially poses a challenge,” he added.