It looks like petrol prices will be heading north soon

Cornelia Mascio
Mag 9, 2018

Oil prices had been supported by expectations that Trump would pull out of the deal, which could hit Iranian crude exports and feed geopolitical tensions in the Middle East, home to one-third of the world's daily oil supply.

"What's hard to gauge is whether or not there would be some sort of broader reaction in financial markets, some sort of tightening in financial conditions because investors became more concerned about risk", said Lewis Alexander, chief USA economist at Nomura Securities in NY.

The forward market for oil price has responded to all of this by moving into steep backwardation - meaning future oil prices are much lower than current oil prices.

The Dow Jones Industrial Average was off 39 points at 24,313, a fall of 0.2%, at last check.

Since the Iran nuclear deal went into effect, its exports have risen to about 2.5 million bpd, from less than 1 million bpd.

"There is good reason to think that the normalisation of monetary policy in advanced economies should continue to prove manageable for (emerging market economies), he told a conference in Zurich on Tuesday".

On Wall Street on Monday, the S&P 500 gained 0.35%, boosted by Apple's sixth straight day of gains.

Chief energy officer Ramanan Krishnamoorti with the University of Houston says, "Rising crude oil prices is a positive thing for Houston the Energy Capital of the World".

In televised remarks, Trump said that the United States was withdrawing from the Iran nuclear deal, which he called "defective at its core".

India initially paid Iran via a Turkish bank before routing payments through a domestic financial institution the last time sanctions were in place.

Iran re-emerged as a major oil exporter in 2016 after worldwide sanctions against it were lifted in return for curbs on its nuclear program, with its April exports standing above 2.6 million barrels per day (bpd).

After Trump's remarks, oil prices pared some of their earlier losses.

The increases came despite nine US oil rigs bringing the total count to 834, energy services firm Baker Hughes said on Friday.

Oil in NY was on the verge of passing $70 a barrel for the first time since November 2014 as traders braced for a re-imposition of United States sanctions on Middle East crude producer Iran. Brent crude futures rose 1.9 percent to $76.26 per barrel, within a whisker of its 3 1/2-year high of $76.34 set on Monday.

Energy stocks mostly reversed an early tumble. The US has said that it may impose further sanctions if it believes democracy is being undermined which could worsen the situation. Boeing fell 0.6 percent to $338.37, while Total dipped 0.5 percent to $61.67.

Tokyo ended 0.4 percent lower, Hong Kong was up 0.2 percent in the afternoon and Shanghai was 0.1 percent off at the close.

Shares in entertainment giant 21st Century Fox Inc.(FOXA) climbed 0.7% after a report that Comcast Corp.(CMCSA) is preparing an all-cash deal ( to top Walt Disney Co.'s (DIS) $52.4 billion bid for some Fox assets.

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