Oil prices surge 4% after Iran military leader killed in US strike

[ASKardar]

https://www.facebook.com/

Oil prices moved higher Friday after a top Iranian general was killed in a US airstrike ordered by President Donald Trump.

Futures for Brent crude, a global benchmark, jumped 4.3% to $69.08 per barrel on Friday. US oil futures gained 4.1%, reaching $63.69 per barrel. Both are on track for their biggest daily gains in about a month and their highest prices since September, when Iran attacked Saudi oil facilities.

Qasem Soleimani, commander of the Quds Force of Iran's Islamic Revolutionary Guards Corps, was killed in the strike at Baghdad International Airport.

The Pentagon said that Soleimani was "actively developing plans to attack American diplomats and service members" and that the strike was aimed at "deterring future Iranian attack plans."

The killing of the powerful Iranian general risks further escalating tensions in the Middle East, which is home to major oil producing countries and key energy supply routes.
Iranian President Hassan Rouhani said in a statement that his country would take revenge for the killing of Soleimani.

"An indirect response is the most apparent course of action, and oil installations and tankers were my first thoughts," said Jeffrey Halley, senior market analyst for Asia Pacific at Oanda, in a research note.

But Halley added that it's hard to tell whether Friday's surge will be sustained.

Oil prices spiked more than 14% in September after coordinated attacks on crucial Saudi Arabian energy production facilities disrupted 5% of the daily global oil supply.

The United States blamed Iran for those attacks, but prices pulled back quickly after Saudi officials said the kingdom would rely on reserves to keep exports stable. Iran denied that it was responsible. It took Saudi Arabia just 11 days to restore production, according to the International Energy Agency.

A spate of attacks last year on oil tankers near the Iranian coast also demonstrates the potential for market disruption.

Two oil tankers were attacked in June near the Strait of Hormuz, a strategic choke point through which roughly 30% of the world's sea-borne crude oil passes.

"Given the scope for tension to persist in the Strait of Hormuz, a protracted period of higher oil prices has to be a risk," said Kit Juckes, a strategist at Societe Generale.

Stock markets sag

There were other signs of investor unease on Friday.

The price of gold, which traders tend to buy in times of uncertainty, increased by 1.3% to $1,547.89 per ounce. The Japanese yen, another safe haven, strengthened 0.4% against the US dollar.

Elsewhere on Friday, major Asian stock indexes reversed earlier gains and traded lower following the news.

Hong Kong's Hang Seng Index (HSI) shed 0.3%, while South Korea's Kospi (KOSPI) was little changed. China's Shanghai Composite (SHCOMP) was down 0.1%, after seesawing between gains and losses.

Japanese markets were still closed for the New Year's holidays and will resume trading on Monday.

Stocks in Europe were lower in morning trade. The FTSE 100 was down 0.7% in London and Frankfurt's DAX dropped 1.9%.

SOURCE: https://edition.cnn.com/2020/01/02/investing/oil-prices-iran-commander-baghdad/index.html

 

[Haris Ali2140]

https://www.facebook.com/

Oil prices moved higher Friday after a top Iranian general was killed in a US airstrike ordered by President Donald Trump.

Futures for Brent crude, a global benchmark, jumped 4.3% to $69.08 per barrel on Friday. US oil futures gained 4.1%, reaching $63.69 per barrel. Both are on track for their biggest daily gains in about a month and their highest prices since September, when Iran attacked Saudi oil facilities.

Qasem Soleimani, commander of the Quds Force of Iran's Islamic Revolutionary Guards Corps, was killed in the strike at Baghdad International Airport.

The Pentagon said that Soleimani was "actively developing plans to attack American diplomats and service members" and that the strike was aimed at "deterring future Iranian attack plans."

The killing of the powerful Iranian general risks further escalating tensions in the Middle East, which is home to major oil producing countries and key energy supply routes.
Iranian President Hassan Rouhani said in a statement that his country would take revenge for the killing of Soleimani.

"An indirect response is the most apparent course of action, and oil installations and tankers were my first thoughts," said Jeffrey Halley, senior market analyst for Asia Pacific at Oanda, in a research note.

But Halley added that it's hard to tell whether Friday's surge will be sustained.

Oil prices spiked more than 14% in September after coordinated attacks on crucial Saudi Arabian energy production facilities disrupted 5% of the daily global oil supply.

The United States blamed Iran for those attacks, but prices pulled back quickly after Saudi officials said the kingdom would rely on reserves to keep exports stable. Iran denied that it was responsible. It took Saudi Arabia just 11 days to restore production, according to the International Energy Agency.

A spate of attacks last year on oil tankers near the Iranian coast also demonstrates the potential for market disruption.

Two oil tankers were attacked in June near the Strait of Hormuz, a strategic choke point through which roughly 30% of the world's sea-borne crude oil passes.

"Given the scope for tension to persist in the Strait of Hormuz, a protracted period of higher oil prices has to be a risk," said Kit Juckes, a strategist at Societe Generale.

Stock markets sag

There were other signs of investor unease on Friday.

The price of gold, which traders tend to buy in times of uncertainty, increased by 1.3% to $1,547.89 per ounce. The Japanese yen, another safe haven, strengthened 0.4% against the US dollar.

Elsewhere on Friday, major Asian stock indexes reversed earlier gains and traded lower following the news.

Hong Kong's Hang Seng Index (HSI) shed 0.3%, while South Korea's Kospi (KOSPI) was little changed. China's Shanghai Composite (SHCOMP) was down 0.1%, after seesawing between gains and losses.

Japanese markets were still closed for the New Year's holidays and will resume trading on Monday.

Stocks in Europe were lower in morning trade. The FTSE 100 was down 0.7% in London and Frankfurt's DAX dropped 1.9%.

SOURCE: https://edition.cnn.com/2020/01/02/investing/oil-prices-iran-commander-baghdad/index.html

Aaahhh!!!
The sweet fruits of wars.

 

[masterchief_mirza]

I don't get it. I thought uncertainty would cause oil prices to fall. I don't get economics.

 

[graphican]

HATE this increase in oil pricing. For no good reason, I spend more dollars on the same petrol.

 

[RIP Pak LAW]

Bad for Pak economy

 

[Dante80]

I don't get it. I thought uncertainty would cause oil prices to fall. I don't get economics.

It is the other way around. See the 1973 Oil Crisis for details of how this historically works. Generally speaking, when you have uncertainty (crisis, sanctions, political upheaval, war etc) that affects oil exporting nations, then petroleum supply gets disrupted.

For the World to function, you need a hundred million barrels of oil moving around smoothly every day of the year. Any snag (or even fear of one happening soon) anywhere in the supply chain brings shortages, and an increase to the price of oil.

 

[masterchief_mirza]

It is the other way around. See the 1973 Oil Crisis for details of how this historically works. Generally speaking, when you have uncertainty (crisis, sanctions, political upheaval, war etc) that affects oil exporting nations, then petroleum supply gets disrupted.

For the World to function, you need a hundred millions of barrels of oil moving around smoothly every day of the year. Any snag (or even fear of one happening soon) anywhere in the supply chain brings shortages, and an increase to the price of oil.

Thanks. Actually makes perfect sense now!

I get what you're saying on a global level but I still have a question. If risk to Saudi oil now exists because of feared retaliation against Saudi refineries, shouldn't that cause reduced demand for Saudi oil (because of the risk of disruption of flow) and thus shouldn't that specific scenario cause DECREASED Saudi oil prices because of reduced demand for it? Or have I again got that completely wrong?

 

[ARMalik]

And so has the price of Gold just jumped by around 4%.

 

[Dante80]

I get what you're saying on a global level but I still have a question. If risk to Saudi oil now exists because of feared retaliation against Saudi refineries, shouldn't that cause reduced demand for Saudi oil (because of the risk of disruption of flow) and thus shouldn't that specific scenario cause DECREASED Saudi oil prices because of reduced demand for it? Or have I again got that completely wrong?

As you can understand, the reply I provided above was but a gross oversimplification of the myriads of particulars and factors involved in this market sector.

For your specific query, this can help a lot!
Attacks on Saudi oil – why didn’t prices go crazy?

 

[Baz]

Oil prices? oh yeah, another tool that twunts zionists use to cause further chaos around the world.

Lets start using bikes, electric cars. boycott fecking oil

 

[Enigma SIG]

I don't get it. I thought uncertainty would cause oil prices to fall. I don't get economics.

What? You're not making any sense. Uncertainty causes disruption; making demand go higher, and prices go up.
Think of it as people arguing at a thela wala for the last packet of moong phali. Who'd the seller sell it to? If someone pays a higher price; to him it goes.

 

[925boy]

I don't get it. I thought uncertainty would cause oil prices to fall. I don't get economics.

Its reversed - uncertainty and insecurity increase prices of commodities like oil

HATE this increase in oil pricing. For no good reason, I spend more dollars on the same petrol.

There is a good reason, but you are unconscious you are oblivious to it/them. Think outside the box and you'll easily figure it out.

 

[Hamartia Antidote]

4% is not $100/barrel...which in years past is what previous threats declared.

 

[Rasengan]

I don't get it. I thought uncertainty would cause oil prices to fall. I don't get economics.

When you have uncertainty then a small spike usually happens in the market. Oil in the long term will most likely test prices which were seen in 2016. In my humble opinion price will range in the next few months between $65-$50 before a proper decline happens.

 

[opruh]

Good news for our Russian brothers.