May 18 (UPI) -- The price for Brent crude oil, the global benchmark, is up 6 percent this month, or more than $6 per barrel. Prices so far have been supported by geopolitical risk and U.S. President Donald Trump's decision to back out of the U.N.-backed Iranian nuclear deal.
If Brent breaks through $80 per barrel, it would be the highest level since November 2014. That price might lead to broad-based economic concerns.
On Tuesday, the U.S. Commerce Department reported that consumer spending increased marginally last month, noting that higher gasoline prices were eating away at discretionary spending. Later, Saudi Oil Minister Khalid al-Falih offered assurances to his counterpart in New Delhi that markets would be stable enough to support economic growth.
The run toward $80 was supported by interruptions to crude oil exports in Nigeria, a member of the Organization of Petroleum Exporting Countries. European leaders, meanwhile, offered assurances of their own, saying Friday that measures could be put in place to protect European businesses working with Iran.
The U.N. World Economic Situation and Prospects report, meanwhile, outlined a global forecast for growth in gross domestic product at 3.2 percent in 2018 and 2019, a revision upward of 0.2 percent and 0.1 percent, respectively. The revision was made in response to growth in the developing economies as well as the "short-term impact" from the U.S. tax overhaul.
U.N. Assistance Secretary-General for Economic Development Elliot Harris warned in the report that trade risks and geopolitical tensions presented clear and present dangers to the global economy. The increase in commodity prices like oil will lead to inflationary pressures for some economies, but those pressures are more or less contained in the world's developed and developing economies.
Oil prices may react later in the day when Baker Hughes publishes weekly rig count data. A reflection of activity in the exploration and production sector, gains, particularly in the United States, could point to future increases in supply and drag oil prices lower.