NewsCrude oil rising more and more amid fears over oil suppliesPreviousForecastAnalysisCrude oil rose to significant highs amid concerns on global oil supplies where it reached to the highest for more than 7 consecutive months, as the IEA announced that talks with Iran on its nuclear program have reached a failure, which increased the possibilities of a military intervention.
Crude oil opened today’s session at $105.93 reaching so far a high of $106.38 and a low of $105.70 where it is currently trading positively around $106.25
The International Atomic Energy Agency (IAEA) said that it failed in talks with Iran over its nuclear weapon, as the country refused entering the team of inspectors into its nuclear base during two days of talks that ended yesterday.
Talks between the agency and Iran were aimed to ease rising tensions between the country and the west and avoid a possible military intervention, as Israel and the U.S. said that all options are available ensuring no nuclear weapon in the nation, where Iran will not remain silent where it will make a military reaction indeed.
These factors have pushed crude oil strongly upside countering all negative factors that would affect crude negatively and push it to the downside, as the commodity has benefitted from giving Greece the second bailout, but it didn’t pay attention to fears that spread in markets over the ability of Greece to meet the budget deficit’s target that required by troika, as the economy is struggling badly amid these tough austerity measures.
On the other hand, we look on the world’s second biggest economy and oil consumer China, released the preliminary HSBC PMI manufacturing index which advanced to 49.7, compared with January's final reading of 48.8, which indicated that the country’s manufacturing side is getting better and may improve more in the coming period, especially that the Chinese central bank cut reserve requirements from February 24 to support economic growth more.
In general, by collecting all these factors we can see a bullish bias for the commodity and as we said several times before, the effect from Iranian oil supplies may be doubled if a military intervention happens between the west and Iran.