Oil Rides Best Weekly Winning Streak Since 2011 as Risks Mount

* Iran concerns, eroding glut lift crude to highest since 2014
* Brent set for 6th weekly advance, after breaching $80 Thursday

By Heesu Lee and Alex Longley

(Bloomberg) —

Oil in London is set for the longest run of weekly gains in seven years as concern over supply disruptions from the Middle East to Venezuela grows and a global glut dissipates.

Brent is heading for a sixth weekly advance after topping $80 a barrel for the first time since 2014 on Thursday. Renewed U.S. sanctions on OPEC producerIran and shrinking supplies from Venezuela have buoyed crude’s recent rally. The International Energy Agency said OPEC and its allies have finally eliminateda global surplus, adding to the bullish signs.

“Oil has a lot of good things going for it in these times,” says Jens Pedersen, a senior analyst at Danske Bank A/S. “There’s the Iran story which continues to develop and the general talk about a tighter market. It will be interesting to see if we make a clean break of $80 next week. It seems like that’s the direction we are going. ”

Supply concerns have led Goldman Sachs Group Inc. to say the market could be heading for a shortfall. Investors are watching for clues on whether the Organization of Petroleum Exporting Countries and Russia will ease their supply-curb agreement and instead raise output to fill any deficit. Still, crude at more than three-year highs could end up slowing demand growth, according to the IEA and Total SA.

Brent for July settlement added 35 cents to $79.65 a barrel on the London-based ICE Futures Europe exchange at 11:23 a.m. local time. Prices are up 3.3 percent this week. The benchmark traded at a $7.98 premium to West Texas Intermediate for the same month, after the spread rose the highest since March 2015 on Thursday. While Brent has rallied on political risks, supply bottlenecks in the U.S. are deepening WTI’s discount, Pedersen said.

WTI for June delivery was at $71.57 a barrel on the New York Mercantile Exchange, up 8 cents, and is headed for a 1.2 percent advance for the week.

See also: Oil’s Rally Above $80 Stokes Fears That Demand Will Suffer

U.S. President Donald Trump last week reimposed sanctions on Iran, a move that could cut exports from the third-biggest producer in the Organization of Petroleum Exporting Countries. The decision has roiled markets and is a reason “why you see the oil price going up and up and up,” Total’s Chief Executive Officer Patrick Pouyanne said Thursday.

While some European and Asian refiners and traders are already looking to replace Iranian barrels, the European Union, which opposes the U.S. move,pledged this week to salvage the accord and maintain oil shipments from the Persian Gulf state.

There’s a “real possibility” of $100 oil, says Jefferies’ analyst Jason Gammel.

Oil-market news:

* Royal Dutch Shell Plc declared curbs on the flow of Nigeria’s Bonny Light crude, which has disrupted a recovery in the West African country’s oil industry.
* Crude oil inventories at seven ports in China’s Shandong province fell to their lowest level in five weeks, according to industry researcher SCI99.

–With assistance from Tsuyoshi Inajima.

To contact the reporters on this story:
Heesu Lee in Seoul at hlee425@bloomberg.net;
Alex Longley in London at alongley@bloomberg.net

To contact the editors responsible for this story:
James Herron at jherron9@bloomberg.net
Rakteem Katakey, Dylan Griffiths