Oil Price Jumps as US Targets Top Iranian General
A relatively quiet start to the decade has already showed signs of merely being the calm before the storm. Can anyone say #WWIII ? Eeek. Today, we’re going to look at the latest twist in the twistiest of sagas that is Middle Eastern politics. Let’s find out what’s going on and why the price of oil is once again on the rise, before giving you a rundown of the most volatile market events coming up this week.
A Crude End to the Week
Oil prices rose sharply on Friday morning, following the killing of a top Iranian general in Iraq. Market analysts warned that the action may lead to increased tension in the region which could, in turn, affect global oil production.
The price of Brent crude jumped by more than 4% to hit $69.50 a barrel at one point, which is the highest it has been since mid-September 2019. By market close, the price had fallen back down to $68.64, still a 3.47% increase on the day.
The US and Iran haven’t exactly been best buddies of late. Well, to be honest, they’ve never really seen eye-to-eye. Tensions go right back to the Cold War when US-backed Iraq fought against its USSR-proxy neighbour Iran during the 1980 Iran–Iraq War.
More recently, the heat has been rising as the US pulled out of a nuclear deal between Iran and also reimposed economic sanctions on the country.
The coming days and weeks will be crucial for traders of all kinds, not least those of Brent Crude, as several of the world’s biggest oil producers are located in the Middle East. Any conflict will likely have a drastic effect on global oil prices.
Share of global crude oil production among the leading oil-producing countries in 2019
Source: Statista
What’s Going on in the Markets This Week?
We get it, when it comes to analysing the markets, it’s not always easy to sort the wheat from the chaff. Which events will cause volatility and which ones will flop. Here’s our roundup of what we think will be the most volatile moments this week.
● On Tuesday, Eurostat will announce the EU’s preliminary Consumer Price Index (YoY) for December (EUR). This will be followed up, across ‘the pond’, a little later with the ISM’s Non-Manufacturing PMI (Dec) (USD).
● You might want to keep an eye on the Chinese Consumer Price Index (YoY) (Dec) (CNY) on Thursday. And ‘Loonie’ traders, look out for BoC’s Governor Poloz speech (CAD), later on.
● Finally, Friday will play host to the biggie: The US Nonfarm Payrolls (Dec) and Average Hourly Earnings (YoY) (Dec) (USD), neither of which are to be missed. If you still have it in you, we’ll also hear from Statistics Canada re. Unemployment Rate (Dec) (CAD).
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The Contentworks Team
