Oil price is heading towards $90 per barrel

How Much Oil Can Saudis Really Pump? We're Set to Find Out

US West Texas Intermediate (WTI) crude futures CLc1 marked $75.90 a barrel around 0630 GMT on Tuesday, their strongest since November 2014.

Brent crude oil futures - the oil market which Nigeria and other worldwide giant trade on - rose to $85.11 a barrel at the open of the market on Tuesday, October 2, 2018, according to data seen on oilprice. That was not far off the $85.45 peak reached in the previous session, the highest since November 2014. Brent has climbed about 20 percent from its most recent lows in August.

The US sanctions on Iran's oil industry could cripple the embattled nation's already struggling economy as it is created to ban the sale of the crude exports from the world's No. 3 producer in the Organization of Petroleum Exporting Countries (OPEC).

That, analysts said, bodes well for overall demand for crude oil to keep increasing, driven by emerging markets and continued growth in the global economy.

The United States and Canada forged a deal on Sunday to salvage the North American Free Trade Agreement (NAFTA) as a trilateral pact with Mexico, rescuing a three-country, $1.2 trillion open-trade zone that had been about to collapse.

"U.S. (fiscal) tightening, higher oil prices and ongoing trade frictions are all taking their taking their toll on the growth outlook", HSBC said.

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According to OPEC, the crude oil market is well supplied now and there is not any need for further production increase.

At $83 a barrel, crude now is at its highest for four years and some big trading houses now think $100-a-barrel crude is likely, a price which may trigger some rationing of demand.

Oil headed for its longest string of quarterly gains in more than a decade as impending supply disruptions threaten to fracture a global market with little margin for error. "However, such optimistic claims are falling on deaf ears", PVM Oil Associates strategist Stephen Brennock said.

U.S. President Donald Trump spoke to Saudi King Salman on Saturday on ways to maintain sufficient supply. Also, several major buyers in India and China have revealed plans to cut purchases of Iranian oil.

China's Sinopec Corp is halving loadings of crude oil from Iran this month, as the state refiner comes under intense pressure from Washington.

Brent's six-month calendar spread, which has been a good proxy for the global supply-demand balance in the last 25 years, has risen by $2.50 per barrel and swung from a small contango into a pronounced backwardation.

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