Investment banks and hedge funds say oil prices have rallied too far too fast, but the fear and uncertainty gripping the market will keep pressure on crude futures in the coming weeks.
Brent crude hit a new four-year high of $86.74 on Wednesday, fueled by concerns about a shortfall in global supply as U.S. sanctions whittle away at Iranian crude exports. The market is just one month away from the Nov. 4 deadline that President Donald Trump set for oil buyers to stop purchasing Iran’s crude.
In May, Trump pulled the United States out of the 2015 Iran nuclear deal and restored sanctions on OPEC’s third-largest oil producer. Much of the world — including the European Union, China and Russia — oppose the move, but companies around the world have curtailed their imports from Iran for fear of running afoul powerful U.S. sanctions.