Microeconomics

Powerful Essays
Oil rises above $103 ahead of Iran nuclear talks
Published: Thursday, 12 Apr 2012 | 5:43 AM ET

SINGAPORE - Oil prices rose above $103 a barrel Thursday in Asia as traders looked to negotiations this weekend over Iran's nuclear program.
Benchmark oil for May delivery was up 42 cents to $103.12 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose $1.68 to settle at $102.70 in New York on Wednesday.
Brent crude for May delivery was up 30 cents at $120.48 per barrel in London.
Crude has jumped from $75 in October as investors worried a military attack by Israel or the U.S. on Iran's nuclear facilities could disrupt global crude supplies. However, oil has slid from $110 last month amid optimism meetings between Iran and the U.S., France, Britain, Russia, China and Germany that begin Saturday in Turkey could ease tensions.
"If negotiations were to succeed and some acceptable compromise achieved, the energy markets would breathe a collective sigh of relief and prices would decline," said Richard Soultanian of NUS Consulting. Soultanian estimated concern that Iran's crude exports will be cut by a military conflict or tighter sanctions has added about $15 to the price of oil.
Analysts are most concerned that Iran, OPEC's second-largest oil producer, will fail to compromise on its nuclear operations and Israel will launch a pre-emptive attack against them. Bank of America Merrill Lynch estimated a major supply disruption of Iranian crude would push Brent crude up by as much as $40.
"A conflict between Israel and Iran could have severe consequences for global oil production and distribution," Bank of America Merrill Lynch said in a report. "A sustained rise in oil above $150 would likely push the U.S. into recession."
China's first quarter economic growth figures, due Friday, are also expected to provide a cue for the oil market as the country is a major consumer of fuel.
In other energy trading,

You May Also Find These Documents Helpful

  • Good Essays

    ECON 545 Project 1

    • 730 Words
    • 3 Pages

    Crude oil prices are determined by worldwide supply and demand, which is why as countries around the world developing rapidly, the demand for and price of gas increases rapidly. Natural disasters and Political conflicts in major oil producing regions such as Saudi Arabia, Iran and Iraq can also affect the price of gas. The Organization of Petroleum Exporting Countries (OPEC) also has significant influence over the price of crude oil because its members produce over 40% of the world’s supply of oil and own more than two-thirds of the world’s estimated oil reserves.(2)…

    • 730 Words
    • 3 Pages
    Good Essays
  • Satisfactory Essays

    When the war just started (2003-2004), an oil bar was $24,- a barrel. It went up to $143,- in 2011 and nowadays the price fell down to $122,80 which is still almost 5 times the price it was before the war.…

    • 567 Words
    • 3 Pages
    Satisfactory Essays
  • Good Essays

    Lotus Rental Csr

    • 605 Words
    • 3 Pages

    References: Davies, R. (July 11, 2013). Oil Prices Rise, Again, Now $107 a Barrel. Retrieved from http://abcnews.go.com/blogs/business/2013/07/oil-prices-rise-again-now-107-a-barrel/…

    • 605 Words
    • 3 Pages
    Good Essays
  • Better Essays

    Gm545 Project 1

    • 846 Words
    • 4 Pages

    Crude oil and petroleum product prices can be affected by events that have the potential to upset the flow of oil and products to market, including geopolitical and weather-related developments. These types of events may lead to actual disruptions or create uncertainty about future supply or demand, which can lead to higher volatility in prices. The volatility of oil prices is inherently tied to the low responsiveness or "inelasticity" of both supply and demand to price changes in the short run. Both the stock of oil-using equipment and oil production capacity are relatively fixed in the near-term. It takes years to develop new supply sources or vary production, and it is very hard for consumers to switch to other fuels or increase fuel efficiency in the near term when prices rise. Under such conditions, a large price change can be necessary to re-balance physical supply and demand following a shock to the system.…

    • 846 Words
    • 4 Pages
    Better Essays
  • Powerful Essays

    Iraq War Cost

    • 2632 Words
    • 11 Pages

    The “Financial Times” magazine in 2007 revealed that Iraq could have almost double the reserves of oil than it had earlier been thought. The war thus meant that it could be hard in the future to deal with Iraq’s security even to matters that concerned its oil and by products. This means that the global prices of oil could be affected by the war as it had a direct affect to its production (Gafarli, 2007). The oil prices have since increased steadily and have continued to sell high since the war began. The prices of crude oil do not affect just the United States, but the entire world. A good example of a country that is suffering from this is India. India’s oil demand increases at a steady rate of 4-5 percent annually. Iraq has since ruled out any subsidized oil prices to India, stating that the law of the land does not allow them to do so. This has adverse effects on the economy of India as it imports about 20 million tons of oil from Iraq every year. This means that Iraq is the second largest supplier of oil crude oil to India (Lee,…

    • 2632 Words
    • 11 Pages
    Powerful Essays
  • Powerful Essays

    MW corporation

    • 755 Words
    • 4 Pages

    Also, Amoco and Morgan Stanley projected that the price of a oil barrel will continue to rise for the next 15 years from the current price of $ 20.4 per barrel to $ 44.3 per barrel. This increasing value of per barrel can significantly increase the valuation of the oil fields.…

    • 755 Words
    • 4 Pages
    Powerful Essays
  • Good Essays

    With all the commotion going on in the Middle East and the ever increasing demand for Oil by countries such as China and the U.S it is very easy to see why price of crude oil and gasoline keeps climbing.…

    • 642 Words
    • 3 Pages
    Good Essays
  • Satisfactory Essays

    July 2006 the price had risen to $75 per barrel but by late 2007 the price…

    • 2314 Words
    • 14 Pages
    Satisfactory Essays
  • Good Essays

    The incremental demand in the market is not great for OPEC but as long as the price per barrel is over a hundred dollars they would be fine.…

    • 554 Words
    • 3 Pages
    Good Essays
  • Satisfactory Essays

    The global supply of energy is concentrated within the 12 OPEC countries. (Organisation of the Petroleum Exporting Countries). These countries hold a vast amount of the world’s oil and gas reserves with 81% of proven oil reserves and 49% of proven gas reserves. The aim of the organisation is to unify petroleum policies so that there is a steady supply of energy to consumers, and a steady income for themselves- the producer. OPEC sets production targets for its member nations and generally, when OPEC production targets are reduced, oil prices increase. This was clearly seen in the 1973 Arab Oil Embargo against the US and the West in response to the US’s involvement in the Yom Kippur war against Egypt. The OPEC countries prohibited trade with the USA, UK, Japan, Canada and the Netherlands. It caused the price of oil to rocket, and many countries went in to depression. This shows the importance of cooperation between OPEC member states, as their decisions can affect the price of energy. Furthermore, it emphasises the importance of countries such as the USA cooperating with oil producing countries such as the OPEC countries where energy has been used as a source of power.…

    • 396 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    The price of petrol is reaching nearly 116 dollars a barrel, which is a 20 per cent rise in less than a week, Bulgarian National Television (BNT) reported on March 8 2011.…

    • 945 Words
    • 4 Pages
    Good Essays
  • Better Essays

    Moshiri, S., & Foroutan, F. (2006). Forecasting nonlinear crude oil futures prices. The Energy Journal, 27(4), 81-95. Retrieved from http://search.proquest.com/docview/222031427?accountid=32521…

    • 1197 Words
    • 5 Pages
    Better Essays
  • Powerful Essays

    So I will start at the beginning. I will first explain the tops and peaks and the reasons. The first peak is on march 2, where the WTI crude oil spot price stands on 102.27, is quite a bit more than on the day before (99.63). This is because of the political uprisings against Khadafy in Libya. Libya is a big supplier of oil, but at…

    • 1599 Words
    • 7 Pages
    Powerful Essays
  • Good Essays

    Despite an initial 2% rise in oil prices, oil markets ultimately did not react significantly to the Iranian threat. In fact, Iran threatened to take action if the U.S. Navy moves an aircraft carrier back into the Persian Gulf. However, On 9 January 2012, the Iranian Defense Minister denied that Iran had ever claimed that it would close the Strait of Hormuz, which would create a global conflict as about 90% of the oil exports from the Persian Gulf transit the Strait of Hormuz each day.…

    • 732 Words
    • 3 Pages
    Good Essays
  • Good Essays

    As the US Economy continues to dive, unemployment persists at a level not seen since the Great Depression, and the US Federal Government sees fit to continually bailout big business, it escapes logic why the cost of oil once again, is on the rise.…

    • 1634 Words
    • 7 Pages
    Good Essays