| Page Hits : 10211 |    
Mercantile Exchange Blog
 Prev Next 
 
Jul 20 2012
Middle East Uprising and Oil Prices

The geopolitical situation that is prevalent around the Middle East region with the increase in the tensions arising out of Syria and Israeli accusations on Iran has put an upward pressure on oil prices. The New York Mercantile Exchange crude oil on Thursday, 19th July rose to $ 92.66 per barrel; a nearly $3 increase which is an all time high since May16. The oil prices since then have been rallying showing sensitivity to different stimuli such as the FOMC meeting minutes that indicated a possible new round of easing, the EIA report that concluded a decrease in the crude oil inventories in the US and an improved global Investor sentiment.  And now with such news of political turmoil across these Middle East nations, crude prices will only go further.

Oil prices always have a strong correlation with the geopolitical factors and looking back at history they have mainly revolved around the Middle East nations who are also the global suppliers. Prices have always spurred a rally whenever a political uprising is seen in such nations. The most recent example is that of the Libyan revolution that saw oil prices reaching more that $120 per gallon. 

Similar situation has returned in the market that could again push up oil prices this summer. Syria’s continuous political uproar and the latest Israeli accusations on Iran for the bombing of the Israeli Tourist Bus in Bulgaria on July 19th have brought new series of dismay in the oil futures. Iran has faced oil sanctions from the European market already and now with these growing tensions, it could not make situations any better for the market.

US gasoline prices have also gone up since end of June with the national average reaching to $3.437 per gallon Thursday. The latest EIA report shows a decrease in the crude oil inventories indicating an increasing demand of oil in the economy. On the other hand ethanol which is made of corn and a gasoline substitute also saw price hikes. This is mainly due to the US drought that has led the prices of corn to go up. Analysts believe that there is nearly a four to five cent rise in the recent oil price due to the rise in ethanol prices.

With such array of information coming from around the globe, oil market is pretty much sure to see a rally in prices in the coming days as well. However if situations get any better in the middle east then only that could have a downward pressure in oil prices and break the bullish trend.

 Note: The views expressed in the blog are the sole opinion of the writer and cannot be deemed responsible for any losses incurred.

 

 
Posted by Mex R&D at 20/7/2012 3:07:24 PM
--------------------------------------------------------------------------------------------------------------

 Leave a Reply
65 Visit(s)
 
Name *:
Email ID : (Optional)
Please prove you're not a robot. *
   

 

  0 Comment(s)    
Blog Home
 
 

Get Email Alert
 
 
Search Post
   
   
 
 
Blog Calendar
<< Prev   Next >>
 
Recent Posts
   
CEO of MEX Nepal Honored with Brand Leadership Award
Interaction Program on Commodity Market Regulation at SEBON
MEX Commodities Professional Training - Batch 12
SPACE at Kathmandu Model College
Visit from Eminent Government Authorities-An Exchange Walkthrough
Commodity Market Training at Khwopa College
MEX Commodities Professional Training-Batch 11
सम्माननीय राष्ट्रपतिज्यूबाट विधेयक प्रमाणीकरण
कमोडिटी ऐन आएपछि नियमावली बनाउन जुट्यो धितोपत्र बोर्ड, कर्मचारी पनि थपिंदै
गत साता उकालो लागेर बन्द भएको सुनको बजार कस्तो होला यो साता ?
   
 
 
Recent Comments
   
Lokendra said, how the gold is valued, is this in INR b...
neerab said, Congrats Mex Team. One more step ahead...
Arun Ragothaman said, Very informative and a well rounded anal...
bishal shrestha said, ya agreed! m following the chinese econo...
Samrat said, it's very impotant for global economy to...
Arun Ragothaman said, Everyone knows what a rich man Warren Bu...
Aakash said, disclosure of the trading volume in the ...
ABDULLA PULIKKAL said, Congrts !!!...
ABDULLA PULIKKAL said, Congrats!!!!...
kamal bahadur karki said, Many Many Congratulation Mr Vinayak Jaya...
   
 
 
Blog Archive
2012 (261)
2013 (274)