Middle East uncertainty drives up the price of oil

Bloomberg/Fuel Fix:
Oil rocketed to its biggest weekly gain in more than two years as U.S. President Donald Trump's aborted air strikes against Iran left Middle East tensions simmering with the endgame uncertain.

Crude futures rose in New York on Friday to complete a 9.4% rally for the week. Trump tweeted that he called off raids because of concern the death toll wouldn't have been "proportionate" to Iran's downing of an American spy drone earlier this week. Trump said he was in "no hurry" to respond, despite a series of provocations in the oil-rich region.

The canceled attack sent a "very confusing" message, Daniel Yergin, an oil historian and vice-chairman at IHS Markit Ltd., said in a Bloomberg TV interview. "The fear is that this could pretty quickly escalate. There's plenty of room for accident, misunderstanding, future incidents. The Iranians are in a corner."

West Texas Intermediate for August delivery closed 36 cents higher onFriday at $57.43 a barrel on the New York Mercantile Exchange. The U.S. benchmark notched its biggest weekly increase since December 2016. Brent for August settlement rose 75 cents to $65.20 on London's ICE Futures Europe Exchange.

Gasoline futures, meanwhile, jumped 3.9% as a fire raged at the biggest refinery on the U.S. East Coast.

Hostilities have been mounting in the Persian Gulf region, source of one third of the world's oil, with the drone incident, missile strikes on Saudi Arabia and an attack on tankers near the Strait of Hormuz. On Thursday, a rocket exploded near an Exxon Mobil Corp. workers' camp in Iraq.
...
West Texas oil could have a price advantage over Middle Eastern oil as the cost of shipping rates from the Middle East goes up because of Iranian attacks on tankers.  The rate for a supertanker headed to China is now $26,000.  One of the reasons the US has not responded more aggressively to Iran so far is that it is no longer dependent on the Middle East for its oil supply.  Countries like China have a greater need for keeping the oil flowing.

Comments

Post a Comment

Popular posts from this blog

Should Republicans go ahead and add Supreme Court Justices to head off Democrats

Washington Post: Some Democrats eye adding more justices to the Supreme Court to change its ideological bent The once-remote idea has gained the attention of liberals angered by the GOP push to remake the federal courts. Probably the easy way to defeat this court-packing scheme is for Trump to propose doing the same thing now.  It would lead to Democrat denunciations and claims that it would be wrong, thereby blowing up any attempt by them in the unfortunate event of Democrats winning a presidential election.
Read more

29 % of companies say they are unlikely to keep insurance after Obamacare

Conn Carroll: A new survey of 368 midsize to large companies found that 29% of them are considering terminating their active employee health care plans when Obamacare is full implemented in 2014. Only 71% of employers surveyed said they did not expect to drop their health coverage, while 20% said they did not know and 9% said they were planning to exit. The latest survey, conducted by Towers Watson, echoes an ealier survey by McKinsey & Co. finding that 30% of private-sector employers were planning to drop their employee health insurance coverage by 2014. When the Congressional Budget Office crunched Obamacare's spending numbers, they estimated that only 7% of employees currently covered by employer-sponsored plans would lose their plans. ... This means the cost of the health care fiasco will be hundreds of billions more than estimated by the CBO and Congressional Democrat. It is also clear that Obama's pledge that you could keep your health care plan if you wanted t
Read more

Bin Laden's concern about Zarqawi's remains

James Robbins: ... Bin Laden suggests that President Bush should allow Zarqawi’s body to be returned to his family in Jordan, but this is a matter that is up to the Jordanian government, which so far has not shown much interest in facilitating a homecoming. Bin Laden mocks King Abdullah II, calling him a Coalition minion, and asking “w hat scares you about Abu Musab after he’s dead? You know that his funeral, if allowed to happen, would be a huge funeral showing the extent of sympathy with the mujahedin.” A large crowd would definitely turn out, though most people would be on hand to demonstrate their anger and disgust. Last November’s hotel bombings in Amman , masterminded by Zarqawi, are still fresh in people’s memory, and mentioning them to Jordanians has the same visceral impact as memory of the 9/11 attacks does here. Jordan has adopted a zero-tolerance policy towards those who choose to mourn the country’s least favorite son, and four opposition members of parliament who paid con
Read more