The price of WTI oil increased in early Wednesday Trading, rising above $62. The price of the barrel has, to a large extent, been driven by expectations over the result of the ongoing talks between the US and Iran. While the possibility of a large scale conflict remains a realistic scenario for some, there is also hope that a negotiated outcome will avoid a military confrontation, which if it was to happen would impact not just Teheran’s own oil exports but also the entire Gulf output that passes via the Ormuz straight. Against this backdrop, the announcement of the closure of sections of the straight by Iran, to conduct military exercises, raised the levels of apprehension. The rising tensions halted the fall in prices seen during the previous session, reflecting the increase in supply-side risks. Oil traders will continue to monitor the progress of the talks between the US and Iran, with significant developments likely to be reflected by the variations in the price. Also on the radar will be the release of API stockpiles, due later today. This report is useful guide for traders on the balance between supply and demand, and any surprises tend to cause variations in the price of the barrel.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
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