Crude Oil Is Flying Without Wings!
ICN.com | Jul 22, 2012 08:12AM ET
Crude oil rallied sharply Thursday for the eighth consecutive session with rising tensions in the Middle East that is threatening crude oil and revived oil disruption fears. Also, the good corporate earnings played a significant role in assisting crude higher.
Crude oil opened Friday’s session at $92.55 after Thursday’s huge gains, and the commodity remained well supported by tensions but it might face some correctional moves downwards as it traded throughout the day among a very tight range $92.64-$92.14 a barrel.
The question now is would the Middle East return to push crude oil higher again above $100 levels? Actually it is a high possibility despite the current economic slowdown that raise doubts over the commodity’s demand outlook, especially with the European debt crisis that is affecting the global economy indeed. However, we saw that crude oil jumped around ten dollars in less than ten days amid rising tensions between Iran and the west due to the EU embargo on Iranian crude shipments urging the Islamic Republic to warn the world that it may shut the Strait of Hormuz that carries around 35% of oil exports.
Crude oil rose sharply on Middle East issues on Thursday, as tensions had intensified in Syria after bombs killed three top officials in the government who were close to the President Bashar Al-Assad.
On the other hand, U.S. government officials said that Iran has developed plans to disrupt international oil trade, including through attacks on oil platforms and tankers. Also, Iran could take action against facilities both inside and outside the Persian Gulf, even with no military conflict.
In general, crude oil will remain well supported mainly by the tensions between Iran and the west and how things are going between them. Also, the commodity will be affected by the U.S. dollar which played an important role in pushing crude upwards on Thursday.
The USDIX opened Friday’s session at $82.87 and reached a high of 83.07 and a low of 82.87 and traded around 82.91 mid-day.
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