Oil prices boosted by trade tensions, Iran
While the markets are being distracted by the latest political circuses in the USA & Europe, Oil (#BRENT, #WTI) have been quietly moving higher and are currently trading at $84.30 & $75.50/bbl respectively. The Iranian oil embargo reduces global oil availability by around a million barrels a day, and naturally prices are getting squeezed. The US President has made his displeasure with OPEC known in the usual way via Twitter, but the truth is that OPEC don’t really have a strong interest in selling their finite resource at a price that suits anyone else and why should they ? The only things that will bring the price of oil down now are either a reduction in demand or an increase in supply. While prices move up we don’t expect supply to be increased. However there may be a reduction in demand if U.S./China trade tensions escalate to the point where Chinese manufacturing demand slows. It would take a little while before any effect filters into the market but for the foreseeable future stronger oil prices are going to be a fact of life and we’ll be positioned accordingly.