January crude oil prices drafted support during the early morning hours from mounting geopolitical concerns surrounding sanctions against Iran and a positive outside market tone. Global equity markets rebounded from yesterday's downdraft, while the US dollar retreated. The UK, US and Canada have increased sanctions against Iran over their nuclear program, and that has stoked concerns over potential supply disruptions out of the region. Of special importance is the Strait of Hormuz, which is actively used by Saudi Arabia, Iraq and Kuwait among others for shipping crude oil. Other forces fueling the geopolitical risk premium this morning include rising tensions in Egypt and Syria.
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