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Brent crude surges to $80.72/b after OPEC fails to reassure market; WTI at $72.09/b

London — Crude oil futures continued to surge during the European morning session Monday, approaching the highs of late 2014, with the market questioning whether OPEC and its partners have done enough to keep the market well supplied and with impending Iranian sanctions still spurring sentiment.

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At 1024 GMT Monday, the November ICE Brent crude futures contract was up $1.92/b from Friday's settle to $80.72/b, while the NYMEX November light sweet crude contract was up $1.31 at $72.09/b.

The last time the front-month ICE Brent contract crossed $80/b during intraday trading was in late May, data from S&P Global Platts showed. The front-month contract was last assessed higher at the 16:30 London time close on November 12, 2014, when it reached $81.16/b.

"This is the oil market's response to the 'OPEC+' group's refusal to step up its oil production," analysts at Commerzbank said in a note Monday.

OPEC and its non-OPEC partners gathered in Algiers over the weekend for a meeting of their Joint Ministerial Monitoring Committee, although talk of keeping the market well supplied remained thin on detail.

US President Donald Trump called on OPEC to help curtail the rise in oil prices in a tweet last week.

Saudi energy minister Khalid al-Falih said Sunday that the oil market is balanced, thanks to efforts by OPEC and its partners in boosting production over the last few months.

"Whatever takes place between now and the end of the year in terms of supply changes will be addressed," he told reporters. "The market is reasonably steady, and we should just be dynamic and responsive and responsible."

Further output increases could be seen, though he declined to commit to any explicit volumes nor to any firm timeline.

Crude demand in October is expected to be higher, and output will rise in the coming months to meet rising demand, the Saudi minister said, without providing specific figures.

Falih stressed that the additional output would be demand driven and not serve as a mechanism to influence prices.

"We opine that OPEC+ will carefully calibrate and take a gradual approach in increasing production to prevent for an imbalance in supply side fundamentals into 2018. Oil prices as such remain inclined towards the upside as supply side weakness and risks loom large," he added.

Revised forecasts are emerging to illustrate a return of $100/b for Brent crude as OPEC+ has to grapple with the Iranian sanctions.

"We lift our average Brent crude oil price forecast for 2019 from $75/bbl to $80/bbl compared to a Cal 19 forward of $75," Bank of America said in a note Monday.

This includes a 1 million b/d reduction in Iran exports on a more aggressive US stance and highlights upside risk to this view, the Bank of America note said.

Iran is expected to lose a significant chunk of its production as US sanctions go into force November 5, while Venezuela and Libya also present supply risks.

The US administration on Friday indicated its readiness to ramp up sanctions on Venezuela, which could potentially impact imports of US light oil and refined products by Venezuela, analysts said.

-- Eleni Pittalis, eleni.pittalis@spglobal.com

-- Edited by James Leech, james.leech@spglobal.com