SINGAPORE - U.S. oil prices hit their highest level since November 2014 on Tuesday and Brent crude was also near a four-year peak reached the previous day, with markets preparing for tighter supply once U.S. sanctions against Iran kick in next month.
U.S. West Texas Intermediate (WTI) crude futures marked $75.90 a barrel around 0630 GMT on Tuesday, their strongest since November 2014. WTI has risen around 18 percent since mid-August.
International benchmark Brent crude oil futures were at $85.28 per barrel, up 30 cents, or 0.4 percent, from their last close. That was not far off the $85.45 peak reached in the previous session, the highest since November 2014.
Brent has risen by more than 20 percent from its most recent lows in August.
Sentiment was lifted by a last-gasp deal to salvage NAFTA as a trilateral pact between the United States, Mexico and Canada, rescuing a $1.2 trillion a year open-trade zone that had been about to collapse.
More fundamentally, oil markets have been pushed up by looming U.S. sanctions against Iran's oil industry, which at its most recent peak this year supplied almost 3 percent of the world's almost 100 million barrels of daily consumption.
Trade data in Refinitiv Eikon showed Iran's seaborne exports in September were just 1.6 million barrels per day, the lowest level since mid-2016.
"Oil prices continue to climb, supported by the nearing Iran embargo and related supply concerns," said Norbert Ruecker, head of commodity research at Swiss bank Julius Baer.
"The supply situation looks fragile indeed, as any additional shortfall such as a deterioration of the situation in Venezuela would tighten oil supplies."
HSBC said in its fourth quarter Global Economics outlook that "our oil analysts believe there is now a growing risk it (crude) could touch $100 per barrel".
Washington's sanctions are set to start on Nov. 4, and analysts say there may not be enough spare production capacity in the short-term to meet demand, potentially requiring large storage drawdowns.
Many analysts say the Organization of the Petroleum Exporting Countries (OPEC), of which Iran is a member, will struggle to replace export falls from Iran.
Britain's Barclays bank, however, said on Tuesday that "OPEC has ample spare capacity".
For now, soaring crude prices and weak emerging market currencies, including India's rupee and Indonesia's rupiah, may erode economic growth.
"Admittedly, supply-side concerns are pushing the oil price higher, but there are now clear warning signs on the demand-side, which could yet send prices lower," said Capital Economics in a note to clients.
"Softening demand growth and new supply should cool the bullish sentiment and push prices lower by the end of the year," Barclays said.