Black Gold Shines In The Global Market; US Unlikely To Re-Issue Iran Oil Import Waivers

  • Apr 23, 2019 AEST
  • Team Kalkine
Black Gold Shines In The Global Market; US Unlikely To Re-Issue Iran Oil Import Waivers

Crude oil prices are soaring amid supply disruption in the global market. The benchmark Brent Crude oil Futures rose from the level of $71.20 (Day’s low on 18th April 2019) to the present level of $74.4 a barrel. The WTI Crude also rose from the level of $63.46 (Day’s low on 18th April) to the present level of $66.10 a barrel.

The factor which contributed to the rally of crude prices is the supply shortage in the global market, generated through various events and factors.

The pioneer factor in the oil-rally is the voluntary production cut of OPEC members to support their respective economies. The domestic economic conditions of the consortium depend on the high crude prices, which in turn, led the OPEC member to cut the production to support the crude oil prices.

However, the high prices are now prompting OPEC members to raise additional economic resources and deviate from crude dependence. The deviation coupled with high prices in the international market could further prompt the OPEC members to restore the production to the normal levels, and market participants are eyeing on the upcoming OPEC meeting in June and their stance on production.

Another factor which catapulted the oil prices in the market is the United States sanction on oil exporting countries such as Venezuela and Iran. The U.S. president Donald Trump exerted the ban on export from Venezuela to throw the country’s president, Nicolas Maduro, out of the power, and replace him with the opposition leader, Juan Guaido, which was in line to address the Venezuela Crisis.

The U.S. Sanctions on the country marked a decline in export from Venezuela, which further widened the supply gap caused by the OPEC production cut, and in turn, supported the crude oil prices. The recent civil war in Libya also provided push to the crude oil prices.

Apart from the ban in Venezuela, the United States exerted ban on Iran oil export as well, to curb the Tehran’s nuclear ambitions, which in turn, marked a decline on imports of Iranian oil in the United States.

In the absence of the U.S., the Iranian oil found its way to various oil importing countries such as Indian, Vietnam, etc. The United States initially provided a waiver, on the export of oil from Iran to the countries importing the oil from it, which in turn, exerted slight pressure on oil prices and the oil prices hovered around $70 mark for quite some time.

However, in the recent event, the United States mentioned that the waiver provided by it would end on 1st May 2019, which in turn, created a supply panic in the market, and coupled with high energy demand supported the crude oil prices.

The end of the import waiver marked a loss of supply from a significant oil exporter in the global market, which in turn supported the crude oil prices.

The high energy demand coupled with a significant rise in crude oil prices led the S&P/ASX 200 Energy (sector) index up on the Australian Stock Exchange; many energy stocks outperformed. However, the share prices of Whitehaven Coal Limited plunged by 1.21% as compared to its previous close to mark a close of A$4.410.


Disclaimer

This website is a service of Kalkine Media Pty. Ltd. A.C.N. 629 651 672. The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. Kalkine Media does not in any way endorse or recommend individuals, products or services that may be discussed on this site. Our publications are NOT a solicitation or recommendation to buy, sell or hold. We are neither licensed nor qualified to provide investment advice.

 

All pictures are copyright to their respective owner(s).Kalkinemedia.com does not claim ownership of any of the pictures displayed on this website unless stated otherwise. Some of the images used on this website are taken from the web and are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it below the image.

 

There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.

Are you wondering if the year 2020 might not have taken the right start? Dividend stocks could be the answer to that question.

As interest rates in Australia are already at record low levels, find out which dividend stocks are viewed as the most attractive investment opportunity in the current scenario in our report.

CLICK HERE FOR YOUR FREE REPORT!
   
x
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK