Oil Rises as Saudis Are Said to Be Content With Prices Over $80

Oil rose as Saudi Arabia was said to be comfortable with Brent crude exceeding $80 a barrel.

Futures in London added as much as 1.7 percent. The world’s biggest crude exporter is content to see the global benchmark advance, at least in the short term, as markets adjust to the impact of U.S. sanctions on Iranian supply, according to people familiar with the kingdom’s view. Iranian oil exports have already plunged to a 2 1/2-year low, tanker-tracking data show.

“The comment from Saudi Arabia basically highlights the short-term risk that oil producers may struggle to keep crude between $70 and $80,” said Ole Sloth Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen.

Brent has climbed more than 11 percent from the lows of August as buyers shun purchases from Iran even before U.S. sanctions officially start in November. Still, an escalating trade dispute between America and China is clouding the outlook for demand. Investors and traders are closely watching whether OPEC and its allies will increase output when they meet to discuss strategy in Algeria on Sept. 23.

Brent for November settlement rose as much as $1.32 to $79.37 on the ICE Futures Europe exchange, and traded at $79.05 at 1:15 p.m. in London. The contract fell 4 cents on Monday. The global benchmark crude traded at a $9.51 premium to West Texas Intermediate for the same month.

WTI for October delivery gained as much as $1.04 to $69.95 a barrel on the New York Mercantile Exchange, following Monday’s 8-cent decline. Total volume traded was about 12 percent above the 100-day average.

Some other key oil-market figures, news and events:

China vowed to retaliate after the U.S. said it will impose a 10 percent tariff on about $200 billion in Chinese goods next week and more than double the rate in 2019. Nationwide crude inventories in America likely fell 2.5 million barrels last week, according to a Bloomberg survey of analysts ahead of government data on Wednesday. Stockpiles fell to their lowest level since February 2015 in the week through Sept. 7. While production in the Permian Basin is still trending higher, output per rig has fallen every month since January, according to the Energy Information Administration. Russia’s production costs per ton of oil increased by 2.4 times during the past decade due to growing maturity of key fields, Energy Minister Alexander Novak said at an industry meeting with Premier Dmitry Medvedev.