Oil prices jump in Asian trade on Iran sanctions worries

Oil prices jumped more than 1.00 usd in Asian trading hours on fears of supply disruptions after the International Atomic Energy Agency (IAEA) voted to refer Iran to the UN Security Council, a dealer said.

Oil prices jump in Asian trade on Iran sanctions worries
New York's main contract, light sweet crude for delivery in March, was up 1.03 usd at 66.40 usd per barrel, compared to 65.37 usd in the US Friday.

'I think it's mostly the uncertainty regarding the situation in Iran and the very clear decision of the IAEA to refer the country to the UN Security Council,' said Dariusz Kowalczyk, senior investment strategist with CFC Seymour in Hong Kong.

Iran is the second-biggest producer within OPEC, exporting 2.7 mln barrels of oil per day.

On Saturday, the IAEA voted to refer Iran to the UN Security Council over its disputed nuclear program.

Iran, which says it wants to enrich uranium only to make nuclear reactor fuel, triggered the latest crisis by resuming uranium conversion activities in August and enrichment research on Jan 10. Enrichment is part of the process of making reactor fuel, but it is also part of the process of making an atom bomb.

Kowalczyk said the market is buying oil on worries that referral to the UN Security Council could lead to sanctions or an oil embargo that would disrupt supply.

'The reason they are so afraid of supply disruptions is there is very little spare capacity,' he said.

Kowalczyk said the Iranian situation will be supportive for oil prices in the medium term, but that there will be day-to-day volatility, 'depending on who says what.'
Source: Forbes
Last Mod: 20 Eylül 2018, 18:16
Add Comment