HomeArticles06.01.2020: Brent hits $70 amid Middle East tensions (Brent, USD/RUB)
06.01.2020: Brent hits $70 amid Middle East tensions (Brent, USD/RUB)
January 7, 2020
The escalation of the conflict between Iran and the United States stirred up the post-holiday thin market. Oil prices surged up amid the news from the Middle East. Today the price of the two oil benchmarks continues to grow steadily. In the morning, the ruble edged lower, losing ground to the greenback. For the first time since May last year, Brent has exceeded the level of 70 dollars per barrel. Today, the benchmark crude oil continued its upward movement. It seems that the first full trading week of the new year is going to contain a lot of geopolitical events which are bullish for oil. Oil prices rose by more than 3%. On Friday, the oil quotes rose sharply after the news on the death of an Iranian military leader as a result of US air strikes in Baghdad. Iran is likely to retaliate in response to the murder of the General. Experts predict different scenarios. Some of them believe that there will be new attacks on oil facilities in the Persian Gulf region similar to the drone attack on the Saudi Aramco plant. If Iran fulfills its threats, the oil price will soar up significantly. Brent may reach 80 dollars per barrel. By Monday morning WTI inched up by 2%. Today its quotes are holding firm, trading above $64 per barrel. Many investors fear that Iran may block the Strait of Hormuz through which a significant volume of oil produced by the Gulf countries is exported. Traders will also take note of the news on
the phase one trade deal between the US and China. Today the dollar/ruble pair gained 17 kopecks compared to the previous trade, but then it lost steam. The greenback costs 62 rubles, 18 kopecks. The Russian currency declined due to traders’ fears over the escalation of tensions in the Middle East.