Recent Global Crude Oil Prices Moved Higher

Oil prices worldwide moved higher recently in the midst of worries regarding the continuous standoff of Iran against Western nations over its nuclear program. The main contract of New York, West Texas Intermediate (WTI) Crude prices for July delivery, rose by 20 cents to finish at $90.86 per barrel. In London, Brent North Sea crude prices for July delivery grew by 28 cents to close at $106.83 per barrel.

In New York, volumes were low as markets got an advantage for the Memorial Day weekend. Markets are closed on Memorial Day, the unofficial opening of the summer driving and vacation season in the United States.

According to analysts of BMO Capital Markets, not much can be reported of the day where no significant movement in the market occurred. Moreover, they added that the market basically keeps on being careful with the economic issues of Europe, the slow recovery of the economy of the United States and the potential weakening of China.

Investors stayed anxious about Greece’ possible departure from the euro trade group amid struggles with its huge debt problem and its probable effect on other countries in the Eurozone with big financial issues like Spain and Italy.

According to Andy Lipow of the Lipow Oil Associates, worries about the nuclear program of Iran, alleged to be covering a weapons program, bolstered New York’s crude oil prices.  He said that the market does not want to sell off prior to the start of the long weekend because of headlines about the nuclear enrichment program of Iran that inspectors discovered.

The International Atomic Energy Agency saw uranium traces of higher grade in Iran. However, Iran said that it was probably caused by a technical issue instead of a hidden attempt to develop a weapons program.

Iran and six other nations recently concluded the intense nuclear discussions held for two days in Baghdad without any progress and with an agreement to convene again in Moscow on the 18th and 19th of June.

According to Carsten Fritsch, a Commerzbank analyst, current crude oil prices remain elevated due to insufficent developments at the talks. Before the discussions, there were hopes for a breakthrough. However, since those goals remain unattained, the risk premium remains, if to a lesser degree, which would dispute any decline in oil prices in the future, said Fritsch.

By: Chris Termeer

Chris Termeer

Chris Termeer is an oil and gas consultant, industry commentator and analyst. His book, Fundamentals of Investing in Oil and Gas provides a comprehensive overview of all aspects of the oil and gas industry, including exploration, drilling, production, storage, transportation and refining, to name but a few.

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