The crude oil price may under selling pressure because now the world oil outlook prediction is that crude oil is weakening demand against the backdrop of the decline of the US-China trade war debate. the president of the World bank comments on the backdrop of yet another cascade of corporate earnings thorough the week by this comments the downward move may be amplified by global growth. So by this situation can escalating US-Iran tensions mitigate.
The price of crude oil
Organization of Petroleum Exporting Countries (OPEC) will publish its World Oil Outlook (WOD) on fifth November. The industries of the crude oil have been worry, this year by weakening demand amid a synchronized slowdown. This industry has pressurized due to producers and forced major players to adopt supply-cutting policies. So for, it appears cuts in production have not been able to override the downward forces of formidable fundamentals.
Escalating US-Iran tension
Due to the US- Iran tensions the oil trader’s industries prepared for another flare-up the analysts of the energy have told the CNBC, as President Donald Trump’s administration to prepare for the impose the Major new sanctions on the Islamic Republic.
The US spy drone has been attacked since May either or near the Strait of Hormuz. This attack by the US Spy drone on the world busiest transit lane for seaborne oil shipments that separates Iran from its neighboring Gulf states. The squall of the attacks has escalated tension between the U.S and Iran.
When asked a question that there is an insufficient amount of geopolitical risk premium priced into energy markets at presents Hewitt Replied
“The simple answer is yes and absolutely Yes.”
“if we go to more sanctions today you would expect that they will react more. So, back to the geopolitical pricing in the crud, you have got to think that there is a greater potential for something to happen at some point in the future be it this week or next or as we go forward,”
At 8:30 a.m. ET the Brent crude oil was trading at $65.28 on Monday, up around 0.1% while U.S WTI stood at $57.88, more than 0.7% higher
So, therefore, there is a chance of US –Iran tensions escalating are very high. Although already approved the military strike against Iran late Thursday in retaliation for the downing of an unmanned American drone, before abruptly reversing his decision.
So there is a chance if the crude oil OPEC may fall then the tension between the US and Iran escalates.