Middle East Tension Continues To Drive Oil Price Sentiment

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According to a Freight Investor Services article, crude saw a late drop in prices last night after the U.S. Secretary of State dropped some concessionary words hinting that progress was being made with Iran that could lead to a renegotiation of the Iran Nuclear agreement.

A Backward Turn Likely?

Equally we wouldn’t be surprised to see this situation take a turn backwards before we see any resolution to it. The U.S. plans to brief foreign diplomats based in Washington this week on a new maritime security initiative to protect shipping in the Middle East, following a spate of attacks on tankers in recent months.

NATO To Protect Shipping from Disruptions?

This follows the actions of the UK to protect shipping and I wouldn’t be surprised if wider NATO+ group come to some agreement to protect all their shipping from disruption and potential attack by Iran over the comes months. This kind of agreement would see off Iran and cool things in the Gulf, but would definitely antagonise the Iranians and leave them feeling even more isolated, so they could conceded in negotiations or become even more erratic.

The EIA data to brings even more cheer into our life at 15.30pm UK time this afternoon – apparently crude inventories fell by 1.4 million barrels in the week to July 12 to 460 million, industry group the API said on Tuesday. That compared with analysts’ expectations for a decrease of 2.7 million barrels.

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Source: Freight Investor Services

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