Analysis

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USOIL
Mar 8, 2021, 11:38 AM GMT
#Commodities

Crude Jumps as Tensions in the Gulf Escalate. Time for a Correction?

Crude oil opened this week's trading session by nearing a price tag of 68.00 dollars per barrel before retracing back to 66.30. The jump was caused by fears of escalating tensions in the gulf, underpinned by the raging war between Saudi Arabia and the Iran-backed Houthi rebels. The Saudi Energy Ministry reported that a drone strike targeted an oil storage tank on Sunday, stirring temporary panic over potential disruptions to production.

It was later reported that no lives were lost during the strike, nor any damages inflicted upon Saudi Arabia's oil facilities, which offset some of the initial fears. Nevertheless, the strike exposed gaps in Saudi Arabia's defence parameter, signifying the possibility for more destructive attacks in the future.

The energy market remains unnerved even as the initial volatility outburst is now subsiding. Meanwhile, the demand for crude remains high as global economic activity continues to pick up. And this week's U.S. inflationary data is likely to bolster this trend. All of this is happening as investors' sentiment is changing, underpinned by easing economic circumstances.

Profit & Loss
Short Term Long Term Net % Gains
+ - + -
2.48 USD 0 3.21 USD 0
8.83%
Short Term
+ -
2.48 USD 0
Long Term
+ -
3.21 USD 0
Net % Gains
8.83%

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