Oil price rises to four-year high

The oil gauge, which last hit such levels in November 2014, has risen nearly 26% so far in 2018.

Gathering in Algeria on Sunday, energy ministers from members of the Organisation of Oil Producing Countries met to ponder solutions to ongoing challenges for the cartel and, despite calls of displeasure from Washington, no additional supply boost was agreed. Russia, a major non-Opec producer, echoed this message.

After President Trump last week used Twitter to voice his frustration that other oil producers were not upping supply to reduce prices, Saudi energy minister Khalid al-Falih said at the meeting: “I do not influence prices.”

Al-Falih noted that markets are adequately supplied and that the Kingdom holds spare capacity to increase supply if needed. He said that an output increase is unlikely in 2019, barring market surprises.

Analysts at UBS said the Presidential tweet in May "appeared to catalyse OPEC producers and Russia to raise production. This time, however, the uncertainty now lies with Saudi Arabia's capacity (rather than its willingness) to raise production."

Looking forward, UBS sees risks to the oil price as being "skewed to the upside in the short term", with the final quarter of 2018 to be "crucial" for the global oil market as Iranian exports begin to decline ahead of US sanctions starting in November.

"As Iranian exports fall and Venezuelan output declines claimed spare capacity in Saudi Arabia, Russia and other Gulf producers may be required. US midterms in November will likely bring gas prices into focus and raises the risk of an SPR release. Downside risk to oil prices is driven mainly by the demand side, stemming from trade disputes and higher oil prices (exacerbated by weaker EM currencies)."

"What instigated this [crude price] move is the question that many are asking because surely Trump doesn’t like higher oil prices and he has tweeted several times about this," said analyst Naeem Aslam at Think Markets.

Aslam added: "There is clear US political pressure on the countries which are importing oil from Iran. Since the sanctions have been announced, South Korea has dropped its oil import to nearly zero from Iran, but on the other hand countries like Turkey and Japan have reduced very little oil import from Iran. Nonetheless, there is a huge pressure on all US allies to cut their oil supplies from Iran and the fact is that countries are complying. The only difference is that in some places you are seeing much larger cuts than the other."