Iran worries continue to push up oil prices
Oil hit 6 month highs yesterday as the developing news story of the week, the capture of 15 British Sailors by Iran, continues to threaten supply. The price of Light Sweet Crude rose to $66 per barrel and Brent Crude to $67 per barrel.
Iran is the world’s 4th largest exporter of oil and although there has not been any disruption to supply as yet, prices are being pushed up as the failure to develop a swift diplomatic conclusion to the situation increases the chances of military conflict.
The issue of oil in relation to the US economy was touched on earlier this week. We mentioned that rising prices, especially as we approach the heaviest period for oil consumption, could have a serious impact on the disposable income of the US consumer.
This could be expected to lead to an easing of inflationary pressures which has been a major concern to Ben Bernanke in recent months. The FOMC is suffering from mixed signals at the moment but if the above scenario occurs at least it can be decisive and act by initiating another phase of interest rate cuts.
However, rising oil prices may force US industry to push up the price of their goods and services which could exacerbate the mixed signals and economic imbalances which has been such a factor of Fed indecision recently.
The Dollar failed to capitalise on an upward revision of Fourth-Quarter GDP yesterday. As the components of the report we’re fully digested any initial gains were unwound.
Negative sentiment continues to surround the Dollar. Today’s major figures, Personal Incoming & Spending for February and Chicago PMI for March, may give traders another reason to sell it off.
In the Eurozone, French unemployment data is expected to show that the country’s high unemployment rate is being addressed. The European Central Bank, hardly mentioned this week, will be looking for continued signs of improvement so that it can continue to tighten monetary policy.
The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.
Iran is the world’s 4th largest exporter of oil and although there has not been any disruption to supply as yet, prices are being pushed up as the failure to develop a swift diplomatic conclusion to the situation increases the chances of military conflict.
The issue of oil in relation to the US economy was touched on earlier this week. We mentioned that rising prices, especially as we approach the heaviest period for oil consumption, could have a serious impact on the disposable income of the US consumer.
This could be expected to lead to an easing of inflationary pressures which has been a major concern to Ben Bernanke in recent months. The FOMC is suffering from mixed signals at the moment but if the above scenario occurs at least it can be decisive and act by initiating another phase of interest rate cuts.
However, rising oil prices may force US industry to push up the price of their goods and services which could exacerbate the mixed signals and economic imbalances which has been such a factor of Fed indecision recently.
The Dollar failed to capitalise on an upward revision of Fourth-Quarter GDP yesterday. As the components of the report we’re fully digested any initial gains were unwound.
Negative sentiment continues to surround the Dollar. Today’s major figures, Personal Incoming & Spending for February and Chicago PMI for March, may give traders another reason to sell it off.
In the Eurozone, French unemployment data is expected to show that the country’s high unemployment rate is being addressed. The European Central Bank, hardly mentioned this week, will be looking for continued signs of improvement so that it can continue to tighten monetary policy.
The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.
Labels: Iran, oil-prices
posted by Drs Search @ 1:20 PM
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