West Texas Intermediate Crude futures rose as high as $100.23/bbl in New York trading on Friday closing out the week just shy of the $100 level at $99.68/bbl. Brent Crude closed at $107.96 per barrel. The Brent to West Texas ratio has dropped in recent months due to the Seabridge deal to alleviate distribution issues internally in the U.S.
With the uncertainty over oil supply disruptions rising with the civil unrest present in places like Syria, Barhain and Kazakhstan as well as the bombing in Iraq on Thursday which killed 60 people traders are nervous over the near-term.
Let’s not forget the situation that is being fomented with Iran by both the Israelis and the U.S. over their paranoia of the Iranians developing a nuclear weapon. The war drums have been beating pretty steadily during the last few months, especially from many of the Republican candidates for President which only emboldens Israel. Stricter sanctions emanating from Europe and the U.S. over this issue are being considered. The U.S. troop withdrawal that is occurring in Iraq is being blamed for the increase in violence among factions vying for control of what’s left of the country.
The fears among traders are genuine that Iran, having the backing of Russia and China, may not wait for sanctions to develop and move to cut off supplies of oil to those most bellicose.
With the U.S. economy trying to recover and Europe teetering on the edge of financial collapse, an embargo by Iran and supply disruptions in the smaller producers could send oil shooting much higher very quicklyPrevious Post » Stock Prices Moving Up Further Before Christmas