Reuters reported that traders and investors have loaded up on bullish Brent oil bets this week, after signals that Saudi Arabia is in no rush to increase production, even with the price near Dollars 80 and as buyers grow uneasy over the impact of USA sanctions on Iranian supply.
Brent crude oil LCOc1 settled down 78 cents at $78.70 a barrel.
The November Brent crude futures contract rose as much as 1 percent to almost Dollars 80 a barrel after a media report cited unnamed sources as saying Saudi Arabia was "comfortable" with the price at that level.
Opec and oil producers outside the group, including Russian Federation, will meet on Sunday to revise oil production quotas.
The EIA said USA production exceeded Saudi Arabia's in February "for the first time in more than two decades", and that in June and August, it outproduced Russian Federation "for the first time since February 1999". "But we expect the tweets will come nonetheless as we head into the mid-terms".
The focus on oil supply has been reflected in the options market this week, where investors have scooped up large amounts of buy or call options, suggesting they see prices rising.
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USA sanctions on Iran are set to hit Tehran's oil sales on November 5, with S&P Global Platts Analytics forecasting that up to 1.4 million b/d of Iranian supplies will be shut-in.
In the range-bound market, Trump's tweets may drive prices down slightly, said Tyche's Zahir, predicting such tweets would probably continue with USA midterm elections approaching, Reuters reported.
Trump has imposed sanctions in response to Iran's nuclear program that are to go into full effect on November 4. It is unclear whether producers such as Saudi Arabia, Iraq and Russian Federation can compensate for lost supply.
Brent has been trading below the psychologically important $80 level for the last week but could now move higher, Reuters markets analyst Wang Tao said.
U.S. sanctions affecting Iran's oil exports come into force on November 4 and many buyers have already scaled back Iranian purchases. "But this is likely going to break very soon", said SEB Markets chief commodities analyst Bjarne Schieldrop.
"As more evidence gathers that Iranian oil exports are heading sharply down", Tchilinguririan said, "the more emboldened the oil market is likely to be to test, and breach this level".