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Oil prices are rising because of sanctions expectations

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Oil prices are rising because of sanctions expectations
August 07
09:00 2018

Today, the energy market shows a serious increase. The investors’ expectations of reducing Iranian oil exports as a result of sanctions imposed by the United States have become a growth trigger.

At the moment, futures (with a deadline in October) for Brent crude oil (traded on the ICE Futures exchange in London) have increased by $ 0.23 (0.31%) to $ 73.98 per barrel.

WTI benchmark oil (traded on the New York Mercantile Exchange NYMEX) has grown by 0.05 USD (0.06%) – to 69.06 USD per barrel.

We recall that during yesterday’s session, the price for Brent crude rose by 0.54 US dollars (0.7%) to 73.75 US dollars per barrel. WTI exhibited more modest growth, having risen in price by 0.52 USD (0.8%) to 69.01 USD per barrel.

The price for black gold began to grow when it was announced that American sanctions against Iran would become effective not later than November. This could lead to an export decrease of one million barrels per day.

Some experts believe that the market is panicking in vain since China (one of the main consumers of Iranian oil) is unlikely to dance to someone else’s tune when it’s about the US sanctions policy. In addition, the situation is not excluded that official Tehran will be able to find new markets.

Recognized authorities in the energy market agree that in the coming months the world will face a slowdown in the supply growth while maintaining a stable, sustainable demand. If OPEC + fails to quickly increase capacity, then oil quotations will grow significantly.

 

The material was prepared with the participation of Katya Gordon,
a leading analyst of the brokerage company CT Trade

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