Iranian embargos propel oil investments
Crude oil futures gained considerable ground on global commodity markets today, rising as high as $111 per barrel on news that the foreign ministers of the European Union agreed to establish a full embargo against Iranian oil beginning in July. The reports provoked another round of threats from the addled OPEC nation, and its continued warnings of shutting down the Strait of Hormuz bolstered oil investments across the border.
Brent crude oil prices for settlement in March rose $1.11 and settled at $110.97 per barrel on the ICE Futures Exchange in London, while West Texas Intermediate crude oil futures for delivery in February gained $1.05 to $99.38 per barrel in electronic trading on the New York Mercantile Exchange.
Oil investments in both benchmark contracts continued to rise throughout the session, as Iranian officials kept up their threats of closing some of the key exporting routes out of the Middle East.
The upturn in crude oil prices and oil investments may be short-lived however, since no immediate bans will actually be implemented. Those EU members in possession of existing contracts with Iran will have until the first day of July to square away their affairs. Some economists and analysts remain skeptical as to whether the fuel will be able to sustain its leads until that deadline, and whether the ban will actually be utilised to its full extent.
Crude oil also saw support from the currency index, where the dollar fell further down against the euro, prompting foreign traders to flock to the commodity. The upswing in the euro was credited to new advancement being made on the road to negotiating with the creditors of the sovereign debt of Greece. The addled nation’s tumble down the financial charts was the occurrence that set off a chain reaction in the euro zone, prompting recession fears to reignite.