* Energy secretary says other producers can offset Iran losses
* WTI futures advance as much as 1.4%; Brent trades near $82

By Grant Smith

(Bloomberg) —

Oil climbed after the U.S. energy secretary ruled out the release of emergency crude reserves, adding to concerns that the loss of Iranian supplies will tighten markets.

Futures in New York rose as much as 1.4 percent. Energy Secretary Rick Perry said Wednesday that the government isn’t planning to tap emergency stockpiles to prevent prices from surging when American sanctions on Iranian crude are implemented in early November. Total SA’s chief executive officer said prices may be heading for $100 a barrel, but warned this could hurt demand.

U.S. crude is nearing four-year highs after OPEC signaled it’s in no rush to boost production to counter losses from Iran, drawing repeated criticism from President Donald Trump. Top trading houses are predicting the return of $100 oil, last seen in 2014, while Bank of America Corp. and JPMorgan Chase & Co. have increased their price forecasts.

“Some in the market were hoping for an SPR release,” UBS Group AG analyst Giovanni Staunovo said, referring to the U.S. emergency stockpile. “Market sentiment is extremely bullish at the moment. For me, the biggest concern is whether Saudi production needs to go into uncharted territory, and how market participants will react.”

West Texas Intermediate crude for November delivery rose as much as $1.03 to $72.60 a barrel on the New York Mercantile Exchange, and traded at $72.34 as of 8:27 a.m. local time. The contract fell 71 cents on Wednesday. Total volume traded Thursday was 17 percent below the 100-day average.

Brent for November settlement gained as much as $1.10 to $82.44 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude was at a $9.53 premium to WTI.

Trump Tirade

Releasing oil from the U.S. strategic reserve to prevent a price spike would have “a fairly minor and short-term impact,” Perry said, adding that other producers can offset losses from Iran. Earlier this week, Trump accused OPEC of “ripping off” the world after the group stopped short of promising specific extra volumes of crude.

The global oil market faces its tightest quarter in more than a decade in the final three months of this year as diminished Iranian supplies coincide with a resurgence in purchases by China, according to consultants Energy Aspects Ltd.

Meanwhile, government data showed that nationwide stockpiles in the U.S. increased by 1.85 million barrels to about 396 million barrels last week, confounding most analysts in a Bloomberg survey who were expecting a decline. Inventories in the key oil-storage hub of Cushing, Oklahoma, also rose for the first time in three weeks.

Other oil-market news:

* U.S. crude production last week surpassed the previous 11 million-barrel-a-day record, government data showed.
* Iran has sent more crude cargoes under an oil-for-goods deal with Russia before sanctions start in November, while Japan’s imports from Iran fell more than 30 percent last month from a year earlier.
* A proposed plan by the EU, Russia and China to sidestep the U.S. sanctions on Iran by using an alternative payment system won’t give its oil buyers a free pass to handle Iranian crude.
* As sanctions squeeze the Islamic Republic, Abu Dhabi’s plans to sell a new grade of crude and boost output capacity at two offshore deposits may help it fill a possible supply gap.
* Oman oil on the Dubai Mercantile Exchange, which will play a key role when Saudi Arabia sets the cost of its shipments to Asia next month, is now more expensive than New York’s WTI and London’s Brent.

–With assistance from Tsuyoshi Inajima and Sharon Cho.

To contact the reporter on this story:
Grant Smith in London at gsmith52@bloomberg.net

To contact the editors responsible for this story:
James Herron at jherron9@bloomberg.net
Amanda Jordan, Brian Wingfield