NewsOil reached the highest in more than six months
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AnalysisCrude oil soared to very high levels since it closed above the psychological levels at $100, where it reached so far a high of $105.52 which considered to be so high, as many positive factors have provided the commodity with a strong bullish momentum focusing on Iran which halted its oil exports to UK and France.

Crude oil opened today’s session at $104.69 and recorded so far a high of $105.52 and a low of $104.96, where it is currently trading positively around $105.11 a barrel.

At this weekend, many positive factors emerged to support crude oil strongly, as by looking at Europe we can see how investors are optimistic that finance ministers will provide Greece with 130 billion Euros as a second bailout since the country has met all requirements and conditions that troika called for, which pushed crude oil to the upside on a better outlook for the region.

Also, we can notice how China had supported the market strongly and encouraged investors as well, as the People’s Bank of China took a bold move to boost the economic growth in the country by cutting the reserve requirement ratio by 50 points over the weekend, which is a part of its fine-tuning in monetary policy.

Those two factors were very strong and pushed the market significantly including crude which is the largest recipient from these factors, but there is other factors that affected crude as strong as those factors, as OPEC’s second largest member, Iran, has cut its oil exports to British and French companies, and they said that they will sell their oil to new customers.

Talking about new customers that Iran referred to, we can note that India, one of the largest customers for Iran, has continued to import large amounts of Iranian oil neglecting US and allies efforts to tight the belt on the country to stop its progress in developing a nuclear weapon.

This Iranian move has increased fears over oil supplies, as this move raised the tension level between the country and the west, which raised the possibility of a military intervention in the coming period which will put a large question mark on global oil supplies and double oil prices indeed, where a U.N. inspectors’ team arrived to Iran today for talks on its nuclear program.

 Moving to the world’s largest oil exporter, Saudi Arabia, the country has cut its oil production and exports in the last period, according to Joint Organizations Data Initiative JODI, which reported that Saudi’s oil production decreased by 237,000 barrels a day in December, where exports deceased by 440,000 barrels a day.

All these factors we noted to are reasonable justifications for a very high oil prices that we see now, and a much stronger rise might be seen if a military intervention happens between Iran and the west, as for today, crude would be volatile amid the absence of the world’s biggest oil consumer, US, but the upside bias could continue for the rest of the day.