Prolonged nuclear disputes with Iran cause surge in oil investments
Crude oil prices surged more than $1 on the commodity index today, capping off a volatile session on an increase, and reporting their first sustained growth in more than five days. Oil investments flourished despite slightly unfavourable reports from the U.S. Commerce Department, as traders shrugged off slow economic growth figures and instead focused their attention on the new sanctions the West has brought up against Iran and its controversial nuclear program.
The sector recorded strong gains early in the session after the first news of the U.S. sanctions against Iran reached the charts. Those gains later saw themselves dwindle somewhat, as the falling equity markets and lower than expected economic growth reports from the U.S. balanced out the commodity index.
Gross domestic product in the nation for the third quarter grew at an annualized rate of 2.0% rather than the originally projected 2.5%.
West Texas Intermediate crude oil futures for delivery in January ended the day at $98.01 per barrel in electronic trading on the New York Mercantile Exchange, showing an increase of $1.09. Oil investments in the American contract suffered somewhat from the disappointing leads in the nation’s GDP; however, the figures are still the best the U.S. has reported in more than a year.
Brent crude oil prices for settlement in January grew $2.15 and currently sit at $109.03 per barrel on the ICE Futures Exchange in London.
The sanctions the U.S. issued against Iran are aimed directly at the OPEC nation’s financial and energy sectors and prohibit the sale of any services and goods to Iran that would help bolster its petroleum industry. The sanctions will also prevent Iran’s banks from doing business around the globe. Canada, France and Great Britain have all joined the U.S. in administering the penalties.
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Oil investments stand the chance to post tremendous surges on the strength of such sanctions. Iran is the third largest crude oil supplies in the world, and the geo-political turmoil that is unravelling in the Middle East regarding Tehran’s nuclear program, and Syria as well, have caused massive halts in the OPEC exporting efforts.