|Analysis||Yesterday, Oil prices climbed almost 2 percent, as a result of worries in markets that there were tensions in the Middle East, especially as Iran test fired a missile, arousing worries that supplies might become affected in a way, which encouraged investors to approach oil markets right away, as they seek potential in profits.|
The rise in oil prices was also led from rallying stock markets, since an improvement in stock markets usually means higher future production from companies, as they perform better; meaning greater demand on crude oil products. As funds flow in the markets boosts prices; therefore, causing the oil contract to gain $0.82 closing at $66.84, while recording a high of $67.54 per barrel and a low of $65.41 per barrel.
The U.S. stocks closed in the green territory, as investors were looking forward to more company acquisitions and mergers from the technology and pharmaceutical sectors, where higher confidence supported stocks to climb the highest in more than a month. Turning to oil shares, we see that Exxon Mobil gained 0.89 points or 1.29% to $69.59; Chevron Corp. rose 1.04 points or 1.47% to $71.70; while ConocoPhillips leaped 0.63 points or 1.39% to $45.69.
Today; oil prices, after gaining so much yesterday, eased their rise today, especially as the American Petroleum Institute (API) is scheduled to release its U.S. oil stockpiles, in which expectations show that they will incline, meaning that demand in the world's biggest crude consumer is still weak; therefore arousing fears that prices will soon start to slip. The markets today opened at $67.11 recording a high of $67.33 per barrel and a low of $66.70 per barrel.
As long as the global slowdown remains, prices will remain pressured to the downside, because at a time of recession; demand on oil tends to be weak. While if speculations are aroused back in the black gold market regarding the pace of recession easing, it will slightly support oil prices on the short term.