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Brent crude climbed above $80/bbl after OPEC and its allies signaled an unwillingness to lift output as WTI also jumped higher, with prices approaching $72/bbl, points out Bart Melek, Head of Commodity Strategy at TD Securities.

Key Quotes

“With OPEC not guaranteeing that it would automatically replace additional lost Iranian barrels of oil due to sanctions over the weekend, both Brent and WTI saw additional upside. As a result, the necessary factors have now aligned in order to lift crude oil markets even higher.”

“Continued declines in US inventories and firm demand amid pending supply declines stemming from US sanctions directed against Iran are set to tighten global crude markets.”

“Since prices dropped so quickly and fiercely in 2014, technically speaking there are very few strong resistance levels which could prevent prices from once again surging into the $90s/bbl range for Brent.”