Oil hits 26-month high on supply fears – business live

Brent crude prices hit their highest levels since July 2015 after Turkey threatens to turn off a pipeline through northern Iraq

A former Saudi energy ministry official has predicted that the oil price will soon hit $60 per barrel.

Ibrahim al-Muhanna told an audience in Washington last night that Opec’s agreement to restrict supplies will keep prices rising.

“With the current arrangement and commitment of major producers, and their willingness to adjust and extend the agreement, I believe as commercial oil stocks continue to contract, oil prices will gradually increase.

We even might hit $60 per barrel before the end of this year or the beginning of next year.”

Signs that Opec members are enforcing their recent deal to cut production have also helped to drive the oil price up.

Fawad Razaqzada, market analyst at Forex.com, explains:

Oil prices have been going higher in recent weeks due first and foremost to evidence that OPEC and Russia’s efforts to reduce the global supply glut was showing positive results and that the group was somewhat surprisingly sticking to their agreement.

Indeed, according to the OPEC Secretary-General Mohammad Barkindo, the cartel and its partners had implemented more than 100% of their agreed cuts in August. Talks that the production cuts could be extended has been providing further confidence to oil investors that the rally could be sustained.

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Motorists face the prospect of higher prices at the pump after the price of oil hit its highest level in over two years.

The standout trend in markets right now is oil, moving higher pretty steadily….

All of this makes OPEC’s life a little bit easier, but it’s also significant at a wider level.

German election result contributes to euro’s biggest loss of the year yesterday, -0.9% to $1.1850. pic.twitter.com/ny2StPoM7N

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