Hedge funds bet on shortage of Brent oil: Kemp

Crude Oil

Oil benchmark Brent traded little changed on Wednesday after rising to its highest in almost four years in the previous session, while USA crude futures fell as United States' officials tried to assure that the market would be well-supplied before sanctions are re-imposed on producer Iran.

OPEC+ is the name given to the group of oil producers, including non-OPEC supplier Russian Federation, that agreed to curtail output starting in 2017.

LONDON, Sept 24 (Reuters) - Hedge fund managers made only minor adjustments to their overall position in petroleum futures and options in the latest week but continued their rotation out of West Texas Intermediate into Brent.

"We are in a fluid market condition that would require month-on-month meetings", the minister said.

Also Sunday, OPEC released its World Oil Outlook 2040 report.

Oil rallied after the Organization of Petroleum Exporting Countries and its partners stopped short of pledging immediate production increases even though looming USA sanctions on Iran have started removing barrels from the market.

He also took the opportunity to remind Middle East allies that they would "not be safe for very long" without United States protection. "The OPEC monopoly must get prices down!"

While U.S. oil production is near a record high of 11 million barrels per day, subdued U.S. drilling activity points towards a slowdown in output.

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Saudi Energy Minister Khalid al-Falih said on Sunday- before the start of an OPEC and non-OPEC energy ministers' meeting in Algeria- that the signatory states of the oil deal will try to reach a 100 percent commitment within two or three months.

One is Venezuela, which has been faced with a sharp fall in production amid a deepening economic crisis and the threat of US sanctions. Brent crude may spike to above that level in the fourth quarter as the market doesn't have enough excess capacity to replace Iranian barrels, Mercuria co-founder Daniel Jaeggi said.

Another is Iran, which has been the target of new USA sanctions targeting its oil industry since Trump made a decision to pull America out of the 2015 Iran nuclear deal.

Saudi Arabia signaled the kingdom is in no rush to bring oil prices down from current levels.

"It's going to be significantly less than it was, and probably lower than most people expected when the sanctions were announced - hence the higher prices", Luckock said at the APPEC event.

JPMorgan said USA sanctions on Iran could lead to a loss of 1.5 million barrels per day (bpd), while Mercuria warned that as much as 2 million bpd could be knocked out of the market.

Mazrouei also said that OPEC has spare capacity amid supply cuts in Iran and Venezuela, but he stressed that the oil would only be produced "if there is a demand for it".

Meanwhile, U.S. crude inventories are forecast to have fallen for a sixth week, according to a Bloomberg survey of analysts before Energy Information Administration data due Wednesday.

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