Oil again in spotlight

On Tuesday Iran again threatened the oil market, signaling that any new kind of sanctions imposed on Teheran, will result in the close of the Strait of Hormuz. It the most important straits for the global oil trade. That is why such an act can spark big concerns over shortage of oil on the world markets. Only yesterday the prices of European oil settled above 109 USD, a rise of nearly 2%. In the extreme scenario (the close of the strait) they may  go up to even 150 USD per barrel.

However, taking into account the current situation in Europe and the USA, the western governments should try to avoid such a scenario. Despite the fact that a few countries in Europe are determined to impose an embargo on Iranian oil,  the extreme scenario is bad for the global economy and especially for OECD countries. The global slowdown connected with the high oil prices can result even in the recession in a few big economies.

Event to watch

Apart from the release of the index of KOF institute in Switzerland (11.30 CET), today’s calendar is almost empty.

Pawel Kordala X-Trade Brokers

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