UPDATE 10-Oil steady after retreating from 2014 highs on dollar strength


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    * Brent oil touches $80 for first time since November 2014
    * Dollar hits 4-month high vs yen as U.S. Treasury yields
    * Global inventories expected to fall further
    * OPEC cuts and looming U.S. sanctions on Iran lift Brent
    * Saudi, UAE oilmins to meet with Russian counterpart next
    * Shell halts exports from major Nigerian pipeline

    By Jessica Resnick-Ault
    NEW YORK, May 17 (Reuters) - Oil prices climbed above $80 a
barrel on Thursday for the first time since November 2014,
before retreating on a stronger dollar and climbing U.S. output
to end unchanged.    
    A rapid slide in oil supply from Venezuela, concern that
U.S. sanctions will disrupt exports from Iran, and falling
global inventories have all combined to push oil prices up
nearly 20 percent in 2018. 
    The U.S. dollar hit its highest level in four months against
the yen  JPY=  as yields on benchmark U.S. government bonds hit
a seven-year high.  urn:newsml:reuters.com:*:nL2N1SO1MG
    A stronger dollar  .DXY  makes oil more expensive for
importing nations such as those in Asia, which are facing a
trillion dollar bill for their imports this year as demand in
the continent reaches a record high.  urn:newsml:reuters.com:*:nL3N1SO57Q
    Brent crude futures  LCOc1  reached an intraday high of
$80.50 a barrel, but later gave up most gains to settle up 2
cents at $79.30 a barrel.
    U.S. West Texas Intermediate (WTI) crude futures  CLc1 
settled unchanged at $71.49, after earlier also hitting their
highest since November 2014 at $72.30 a barrel.
    Global inventories of crude and fuel have dropped sharply in
recent months owing to robust demand and OPEC-led production
    The Organization of the Petroleum Exporting Countries and
non-OPEC global producers, that have curbed output since the
start of 2017, will next meet to discuss supply policy in Vienna
in June. 
    However, Venezuela's economic crisis, and the prospect of
additional U.S. sanctions following its May 20 elections could
hit the market further.
    "I expect that Venezuelan production will continue to
decline and the upcoming elections hold the spectre of the U.S.
imposing additional sanctions on Venezuela that may hasten the
loss of supply," said Andrew Lipow, president of Lipow Oil
Associates, a consultancy in Houston.
    He said Iranian oil sales could plunge by 300,000 to 500,000
bpd in the next six weeks as well, after U.S. President Donald
Trump's decision this month to withdraw from an international
nuclear deal with Iran and revive sanctions that could limit
crude exports from OPEC's third-largest producer.
    Record domestic oil output and exports have capped the rally
in the United States, and led to a rising premium for Brent
above WTI, which traded at $8.20 a barrel on Thursday, the
widest spread since April 2015.  0#WTCLc1-LCOc1 
    U.S. crude output has soared 27 percent in the last two
years to a record 10.72 million barrels per day, putting it
within reach of top producer Russia's 11 million
bpd. urn:newsml:reuters.com:*:nL3N1SN3EJ
    That has not been enough to stop oil prices rallying, energy
ministers of OPEC's largest producer Saudi Arabia and its
neighbor and fellow OPEC member United Arab Emirates to note
that the market remains well supplied.
    The two ministers, in a joint statement, blamed volatility
in prices on international political tensions. They plan to meet
their Russian counterpart in Saint Petersburg in a week to
discuss the oil market.  urn:newsml:reuters.com:*:nL5N1SO53W
    Global oil inventories were expected to drop further as the
peak demand summer driving season nears, offsetting increases in
U.S. shale output, Bernstein analysts said.
    Several banks have in recent days raised their oil price
forecasts, citing tighter supplies and strong demand.
    Further supporting prices, Royal Dutch Shell  RDSa.L  said
it was halting crude exports from a major Nigerian
pipeline. urn:newsml:reuters.com:*:nL5N1SO3X4

    On the flip side, high oil prices would hurt consumption,
the International Energy Agency warned on Wednesday as it
lowered its global oil demand growth forecast for 2018 to 1.4
million bpd from 1.5 million bpd.  EIA/S  urn:newsml:reuters.com:*:nL9N1AF04H
    The IEA said global oil demand would average 99.2 million
bpd in 2018. U.S. bank Goldman Sachs said consumption would
cross 100 million bpd during the peak summer period. 

GRAPHIC: Russia vs Saudi vs U.S. oil production    https://reut.rs/2rNTili
GRAPHIC: Asia's oil thirst is expensive    https://reut.rs/2wLchCf
ANALYSIS-Asia oil thirst tab $1 trillion a year as crude rises
to $80     urn:newsml:reuters.com:*:nL5N1SN0XP
 (Additional reporting by Henning Gloystein in Singapore and Ron
Bousso in London; editing by Simon Webb and Marguerita Choy)

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