Brent oil surges above US$80 for first time since 2014

500 days and a billion barrels of lost oil pushes crude to $80 per barrel

Oil traded near $71 a barrel as rising stockpiles and signs of slower demand growth countered concerns Iranian supplies will soon be curbed by sanctions. It stood at $79.39 as of 8:20 pm Nigerian time.

"Over the next few years, we expect tightness in one particular product-middle distillate-to lead to strength in one particular liquid, crude oil, and especially those crudes that look like Brent", said Martijn Rats, Morgan Stanley's global oil strategist, in a research note Tuesday.

An agreement between Saudi-led OPEC and Russian Federation on cutting oil production has helped push the price of oil from below $30 in 2016 to hit $80 on Thursday - the highest in almost four years. Retail gasoline prices are up 6 percent since the start of the month and, while a switch to a more expensive summer blend is contributing to the rise, the decision by U.S. President Donald Trump to walk away from the Iranian nuclear agreement was a supporting factor. US light crude was 60 cents higher at $71.56 a barrel, also close to its highest since November 2014.

He said Iranian oil sales could plunge by 300,000 to 500,000 bpd in the next six weeks as well, after US President Donald Trump's decision this month to withdraw from an global nuclear deal with Iran and revive sanctions that could limit crude exports from Opec's third-largest producer. "Supply concerns are top of mind after the United States left the Iran nuclear deal".

Global inventories of crude and fuel have dropped sharply in recent months owing to robust demand and Opec-led production cuts.

Additionally, the market retreated as the U.S. Dollar strengthened against other currencies to the highest since December.

"The restoration of sanctions on Iran, which exports 2.5 million barrels of oil a day and is the world's fifth-largest exporter, may have implications for the market balance", the IEA said.

In addition, the IEA has cut its oil consumption forecasts as higher prices work to reduce future demand. The US can renew economic sanctions against Iran including the petroleum sector.

The US Energy Information Administration said crude inventories fell by 1.4 million barrels in the week to 11 May, compared with analysts' expectations for a fall of 760,000 barrels. A major disruption in Iran could send crude prices higher just as the oil market is emerging from a prolonged period of oversupply.

The IEA, which represents some of the world's largest consumer countries, also said it too would be "ready to act if necessary to ensure that markets remain well supplied".

Over the last three years, the two countries have been a seesaw of production.

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