|News||Crude drops below $86 as Middle East tension prevails|
|Analysis||Crude traded below $86 per barrel today as violent protests in the Middle East keep traders jittery regarding crude supplies, while China’a measures to ease inflation could curb economic growth.|
Crude today hovers around $86 per barrel recording its highest around $86.47 and lowest around $86.02, while it currently trading around $86.24 per barrel.
Recent developments in the Middle East political unrest continue, where Bahrain leaders banned public gatherings sending tanks yesterday into streets and in front of governmental buildings, tightening its grip and in result leading to the death of five protestors and wounding over more than 200. This comes in line with Libya’s “Day of Anger” yesterday as protests clashed with pro-government forces leading to the death of 19 people and several others injured.
Traders are extra jittery regarding the Middle East and North Africa mainly as the region is responsible for 36% of global oil production, alongside being strategically vital to the US especially since Bahrain harbors the fifth Navy Fleet.
Crude yesterday traded around $86 per barrel recording its highest around $86.60 and lowest around $84.36 per barrel, closing around $86.36 per barrel. Futures rose yesterday due to fears overwhelming investors in the Middle East, specifically since Yemen and Libya are the eighth largest oil producing countries in OPEC; while Iran is considered the fourth largest crude producer.
Moreover, another reason behind crude dropping 0.4% is China’s new measures to ease inflation, where its economic indicators dropped for the first time since 2008 and thus resulting in a slow growth pace in the largest energy consumer in the world, thereby curbing global economic growth.
As for NYMEX as of 04:20 EST; motor gasoline rose $0.29 recording $253.500 per gallon; heating is trading around $274.950 per gallon inclining $0.63; whereas natural gasoline shed $0.57 to record $3.846. In London, Brent futures gained $0.69 to record $103.300.