Morgan Stanley lifts Brent oil forecast to $85, seeing undersupplied market

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"Given the extension of the Opec agreement to end of 2018, we expect oil sector growth to be limited this year, especially given the UAE's increasing compliance with the production cuts, which averaged 124 per cent in the first three months of 2018", ICAEW said.

Mr Trump's interventions with tweets "unsettle" the market and appear to have pushed prices up, Standard Chartered Plc energy analyst Emily Ashford and head of commodities research Paul Horsnell wrote in a note Tuesday. On Monday, Hook expressed confidence that the US sanctions policy would not prompt mass shortages, but analysts have expressed doubt that Saudi Arabia can increase production by as much as Trump described.

Rouhani's comments were ambiguous, but in the past years Iran has threatened to block the Strait of Hormuz, a major oil shipping route in the Middle East as retaliation against Washington-imposed sanctions. "On balance, this leaves the oil market tighter than before, with less spare capacity".

Outside North America, looming USA sanctions against major oil exporter Iran were the focus of attention.

"Banking sanctions will also snap back on November 4, and we will be aggressively enforcing these provisions to lock up Iran's assets overseas and deny the Iranian regime access to its hard currency".

Oil prices fell on Monday, reversing course from last week as supplies from Saudi Arabia and Russian Federation rose while economic growth stumbled in Asia amid escalating trade disputes with the United States.

US President Donald Trump sent a message on Twitter that he asked Saudi Arabia to increase oil output by 2 million barrels because "prices to (sic) high".

The U.S. government plans to shut Iran's oil exports out of the market from November, demanding that all countries stop buying its oil.

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Looming U.S. sanctions against Iran further contribute to expected tightness.

On Saturday, President Trump touted an agreement with Saudi King Salman bin Abdul Aziz to vastly increase oil production in an effort to lower prices.

"Oil is already being offered on the bourse, about 60,000 barrels per day, but that has been only for exports of oil products", Jahangiri said.

Craig added that more issues could develop as Washington tightens the sanctions noose on Iran and Venezuela. Inventories at Cushing, Oklahoma, fell 2 million barrels last week, according to a separate forecast compiled by Bloomberg.

She warned that the handling of any economic or oil crisis will "require diplomacy, delicate partnerships and technical knowledge".

Hook declined to say if the kingdom can offer that additional supply, but the United States is "working to minimize disruptions to the global market", Hook said.

Mr Trump is not the first US President to attack OPEC.