SEOUL/LONDON

Oil in London is set for the longest run of weekly gains in seven years as concern over supply disruptions from the Middle East to Venezuela grows and a global glut dissipates.

Brent for July settlement added 39 cents to $79.69 a barrel on the London-based ICE Futures Europe exchange at 12:48pm local time. Prices are up 3.4 per cent this week. It traded at a $8.01 premium to West Texas Intermediate for the same month, after the spread rose to the highest since March 2015 on Thursday. While Brent has rallied on political risks, supply bottlenecks in the US are deepening WTI’s discount, Pedersen said.

WTI for June delivery was at $71.66 a barrel on the New York Mercantile Exchange, up 16 cents, and is headed for a 1.3 per cent advance for the week.

Brent is heading for a sixth weekly advance after topping $80 a barrel for the first time since 2014 on Thursday. Renewed US sanctions on Iran and shrinking supplies from Venezuela have buoyed crude’s recent rally. The International Energy Agency said Opec and its allies have finally eliminated a global surplus, adding to the bullish signs.

“Oil has a lot of good things going for it in these times,” says Jens Pedersen, a senior analyst at Danske Bank A/S. “There’s the Iran story which continues to develop and the general talk about a tighter market. It will be interesting to see if we make a clean break of $80 next week. It seems like that’s the direction we are going. “

Supply concerns have led Goldman Sachs Group Inc to say the market could be heading for a shortfall. Investors are watching for clues on whether the Organisation of Petroleum Exporting Countries and Russia will ease their supply-curb agreement and instead raise output to fill any deficit. Still, crude at more than three-year highs could end up slowing demand growth, according to the IEA and Total SA.

US President Donald Trump last week reimposed sanctions on Iran, a move that could cut exports from the third-biggest producer in the Organisation of Petroleum Exporting Countries. The decision has roiled markets and is a reason “why you see the oil price going up and up and up,” Total’s Chief Executive Officer Patrick Pouyanne said Thursday.

While some European and Asian refiners and traders are already looking to replace Iranian barrels, the European Union, which opposes the US move, pledged this week to salvage the accord and maintain oil shipments from the state.