After years of holding back, OPEC opened the flood gates this summer by increasing crude oil production by 278,000 barrels a day from July to August.
The deliberate spike in production was prompted by concerns about global supply and U.S. sanctions against Iran that go into effect in November. Oil production in Iran, a founding member of the Organization of the Petroleum Exporting Countries, fell by 150,000 barrels a day in August, OPEC said, citing secondary sources.
Rising oil prices are another incentive for producers to turn on the spigot -- Brent futures, the global benchmark for the price of crude oil, were hovering near $80 a barrel Wednesday. The price of West Texas Intermediate, the U.S. benchmark, was up 1.20 percent to $70.45 per barrel early Wednesday afternoon.
These are the highest oil prices since 2014, when a glut of oil, much of it from new shale wells in the United States, sent prices tanking. Oil prices have gone up 50 percent since 2016.
OPEC member states joined other countries by cutting oil production nearly two years ago in an effort to push prices back up. With that accomplished, OPEC has loosened the requirements on production.
Russian Energy Minister Alexander Novak said U.S. trade measures against China are also contributing to the instability in the Global oil market. He said it's adding a $5 to $6 premium to the price of crude oil. The U.S. tariffs against China could reduce that country's demand for crude oil.
"We can see that the pricing situation today depends not just on the supply/demand balance or the general economic situation but also on the uncertainty that we observe today in the global markets: the trade wars, the sanctions that the U.S. pursues," Novak told CNBC.
HSBC has warned that Brent crude oil could reach $100 a barrel, raising its price forecast through 2020.
"While we aren't explicitly forecasting Brent to rise to $100 a barrel, we see real risks of this happening," the bank said in a note Tuesday. "The fact that much higher supply is already needed from the likes of Saudi Arabia--and the low levels of spare capacity remaining--leave the global system highly vulnerable to any further significant outage."
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