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Crude Oil Firms on Mounting Middle East Tensions

crude, oilCrude oil futures contracts, the headline WIT and the international Brent contract, inched higher during the Asian trade session. Traders are worried about supply concerns in the Middle East as tensions are mounting between the United Kingdom and Iran. Last week, Iran seized a British flag oil tanker in the Strait of Hormuz.

Traders are also digesting a recently published report by the International Energy Agency (IEA). The IEA thinks that swift action is needed to counter weakening global demand for the black gold and potential supply disruptions from the Middle East.

As of 3:40 am GMT, the international Brent futures crude contract was up four cents to trade at $63.60 a barrel. The Brent contract rose one percent in the previous session after Iran seized the British oil tanker threatening supply disruptions in the Gulf.

West Texas Intermediate (WTI) crude futures contract, for front month delivery, was trading flat at $56.22 per barrel.

Crude Oil Traders Digest the IEA Report and Mounting Tensions in the Middle East

The recently published International Energy Agency report said that the organization was closely monitoring events in the Strait of Hormuz as tensions between the United Kingdom and Iran remain elevated.

The report said that “the IEA is ready to act quickly and decisively in the event of a disruption to ensure that global markets remain adequately supplied.” The report added that International Energy Agency executive director Fatih Birol has been talking with other IEA members, as well as associate nations.

In a statement the IEA said that “consumers can be reassured that the oil market is currently well supplied, with oil production exceeding demand in the first half of 2019, pushing up global stocks by 900,000 barrels per day.”

About David Frank

David has his MA and PhD in Economics. He is a technical analyst who has been trading in the Forex world for over a decade. As an analyst and trader, David believes in the big picture by blending together technical analysis with the fundamentals behind the scenes in the Forex and Bond markets. David’s trading strategy is unique. He blends an understanding of fundamental and macroeconomics with technical analysis to offer a unique view into Forex. He applies several strategies including carry long positions, to take advantage of high yields in non-volatile markets, as well as using quicker, chart related analysis for day trading.

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