Investing.com - Oil prices rose sharply on Tuesday, after Saudi Arabian officials said they are okay with rising prices in the short term.
West Texas Crude oil futures surged 1.22% to $69.52 a barrel as of 5:29 AM ET (9:29 GMT). Meanwhile Brent crude futures, the benchmark for oil prices outside the U.S., increased 1.29% to $79.06.
Saudi Arabian officials said they are comfortable with Brent prices going above $80 a barrel as markets adjust to the loss of supply from U.S. sanctions, according to Bloomberg.
The comments came after the Organization of the Petroleum Exporting Countries and Russia warned that U.S. sanctions against Iran, OPEC’s third-largest supplier, could put pressure on markets. The sanctions, which are expected to go into effect on November 4, have already caused Iran’s crude exports to fall.
“When you have major producers facing supply challenges, it’s of concern” for OPEC and consumers alike, OPEC Secretary-General Mohammad Barkindo said.
U.S. Energy Secretary Rick Perry said Friday that he does not foresee any price spikes and that Saudi Arabia, Russia and the United States can raise global output in the next 18 months.
The global oil supply rose in August to a record 100 million barrels per day, the International Energy Agency said in its latest forecast on Thursday. The Paris-based organization waned that prices could rise to $80 a barrel unless producers compensate for lost supply from Iran and Venezuela.
In other energy trading, Gasoline RBOB Futures rose 1.60% at $2.0050 a gallon, while heating oil gained 1.44% to $2.2380 a gallon. Natural gas futures increased 0.39% to $2.825 per million British thermal units.