Commodities: Analysts see potential for oil price spike towards $100 a barrel

The market spotlight was firmly on the oil price on Tuesday as West Texas Intermediate crude oil futures continued to trade just off their highest level in four years.

Triggering the recent move higher in oil was last Sunday's decision by the Organisation of Petroleum Exporting Countries to stay put on their levels of production, despite growing concerns that US sanctions against Iran will cut the country's output by as many as 1.5m barrels of oil a day.

When the White House announced its intention to place sanctions on Iranian oil in May, markets had been expecting a reduction closer to between 300,000 to 700,000 barrels.

Against that backdrop, as of 1819 BST front month WTI futures were adding 0.22% to $72.24 a barrel on NYMEX, having hit an intraday high of $72.78.

Nevertheless, for Francisco Blanch at BofA-Merrill Lynch, recent signals from OPEC meant the odds of a repeat of the 2008 oil price spike and subsequent crash - as demand is destroyed - were rising.

BofA-ML's forecast for the price of Brent in 2018 was $80, but there was some 'market chatter' to be heard of a possible jump in prices to as high as $100 a barrel, if not higher.

Over in the base metals space, three month copper futures rose from $6,293 per metric tonne to $6,318 per tonne, in what analysts at Sucden Financial said was a consolidation of recent price gains on "good [trading] volumes", helped in part by further drawdowns in LME copper stocks.

As of 1749 BST, the US dollar spot index was edging lower by 0.07% to 94.12 with the Bloomberg commodity higher by 0.07% alongside.