By Adedapo Adesanya
The price of the Brent Crude oil saw a 1.38% increase or 86 Cents to peak at $63.33 at the global oil market on Monday, July 22, 2019.
The West Texas International (WTI) crude oil recorded a 46 Cents or 0.82% change to rise to $56.22 per barrel on the market.
As oil prices have been yanked higher and lower depending on shifting sentiment between U.S. and Iran as well as from the U.S.-China trade negotiations. In recent week, with the rising geopolitical tension in the Middle East and the prospect of an easing of tensions between the U.S. and China – both factors pushed up crude.
Now, both are heading in the other direction. Despite the U.S. shooting down an Iranian drone, both Washington and Tehran seem open to negotiating. On Thursday, Iranian foreign minister Javad Zarif made “a substantial move,” as he framed it, offering permanent nuclear inspections in return for the removal of U.S. sanctions. It’s not clear that this will lead to anything substantive, but both sides are (somewhat indirectly) talking again. This has dragged down oil.
At the same time, tensions are not easing between the U.S. and China. With both sides at an impasse and resigned to a drawn out affair, and the resulting downside risk to the economy has also undercut oil.
To be sure, these issues will likely continue to see seesawing sentiment with no definite conclusion in the near-term. “In the absence of these binary risks materializing, Brent could continue to trade in a $60 to $67/bbl range,” Bank of America Merrill Lynch said in a note.
The bank said that the market could actually see lower volatility amid declining speculative interest and the easing monetary policy from an array of central banks. Moreover, the oil market is relatively balanced right now from an inventory standpoint, with OECD stocks right around the five-year average. In other words, the risks to the upside and downside are relatively muted, and the result could be Brent bouncing around in the $60s.
Still, oil prices never stay quiet for too long. While Iran and China are making the most headlines when it comes to risks to oil, Bank of America sees a few other less-publicized factors as just as important.
more recommended stories
Asian Equities End Mixed as Trade Worries Resurface
By Investors Hub Asian stocks ended.
European Stocks Rise Sharply as Fiat Chrysler, Renault Merger Talks Gain Traction
By Investors Hub European stocks have.
Upbeat Retail Earnings May Generate Early Buying Interest
By Investors Hub The major U.S..
NNPC, NSCDC Team up Against Oil Vandals in Nigeria
By Adedapo Adesanya The Nigerian National.
$9bn UK Court Ruling: No Need to Panic—CBN Governor
By Adedapo Adesanya With the premise.
LASACO Assurance Plans Share Reconstruction
By Modupe Gbadeyanka The board of.
Buhari Remains as Petroleum Minister as Ahmed Keeps Finance
By Dipo Olowookere President Muhammadu Buhari.
ABCON Trains Members Ahead of FATF Team Visit to Nigeria
By Modupe Gbadeyanka President of Association.