Yemen, Iran and the price of oil

Posted On 30 Mar 2015

Although the oil bulls attempted to use the news regarding a Saudi Arabian led coalition launching airstrikes in Yemen as a reason to push oil prices higher, the commodity has now erased all of its gains and this has not surprised me. Yemen was previously only seen as the 39th largest producer of oil, therefore the sudden gains we encountered late last week were always linked to a hypothetical situation that if other nations became involved in the on-going conflict it might disrupt oil production elsewhere. The keyword here is hypothetical, and there would really need to be evidence of oil production slowing for traders to become more interested.

Right now, there are no indications at all that the coalition-led airstrikes are going to disrupt oil production and this has contributed to the gains being erased.

The other major contributor to the oil markets commencing the week with a bearish momentum is that it appears negotiations on whether to relax nuclear sanctions against Iran are reaching the final stages, which could lead to a further one million barrels a day being pumped into the markets. Such increased inventories would pressure the already aggressive oversupply by around a third, and provide more than enough reason for the bears to squash oil prices lower.

Written by Jameel Ahmad, Chief Market Analyst at FXTM.

Follow Jameel on Twitter @Jameel_FXTM

For more information please visit: Forex Time

NOTES TO EDITORS

FXTM is an international forex broker which provides access to the global currency market and offers trading in forex, precious metals, Share CFDs, ETF CFDs and CFDs on Commodity Futures. Trading is available via the MT4 and MT5 platforms with spreads starting from just 0.5 on Standard trading accounts and from 0.1 on ECN trading accounts. Bespoke trading support and services are provided based on each client’s needs and ambitions – from novices, to experienced traders and institutional investors. ForexTime Limited is regulated by the Cyprus Securities and Exchange Commission (CySEC), with licence number 185/12 and FT Global Limited is regulated by the International Financial Services Commission (IFSC) with license numbers IFSC/60/345/TS/14 and IFSC/60/345/APM/14.

The post Yemen, Iran and the price of oil appeared first on Forex Circles.

Source:: Yemen, Iran and the price of oil

About the Author

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC. Our mission is to maximize the value our clients derive from their most precious commodity, "Time"! By offering advanced and innovative services, optimal customer care and perpetual devotion to our clients, we will ensure that their individual needs are always met as markets continue to evolve over time. Visit ForexTime to learn more www.forextime.com [space height="20"] [social type="facebook"]https://www.facebook.com/ForexTime[/social] [social type="twitter"]https://twitter.com/ItsForexTime[/social] [social type="google-plus"]https://plus.google.com/u/0/+ForextimeFXTM/posts[/social] [social type="youtube"]https://www.youtube.com/user/ItsForexTime[/social]