The global oil benchmark flirted with the $80-a-barrel level again on Tuesday, underlining concerns that an unexpectedly strong crude rally could eventually begin to weigh on economic growth. The combination of renewed U.S. sanctions on Iran, potential sanctions on Venezuela, a rising geopolitical risk premium, strong demand and other factors have made talk of $100 crude sound less outlandish. Indeed, some analysts argue that the backdrop now leaves the market more open to potential price spikes. So what if oil did climb back to triple digits for the first time since 2014? Economists led by Arend Kapteyn at UBS laid it out in a wide-ranging note on Tuesday. Click Read More below for additional information.
National Average Price for Regular Unleaded Current: $3.126; Month Ago: $3.086; Year Ago: $2.179. National Average Price for Diesel Current: $3.245; Month Ago: $3.185; Year Ago: $2.438.
Finnish Transport Workers’ Union AKT has begun their strike impacting all Finnish ports and terminals on 15.2. at 6 AM until further notice. The negotiating parties did not reach an agreement and negotiations will recommence later this week. All vessel operations in Finnish ports, gate moves and handling of containers within terminals are now suspended until further notice.
Oil in New York climbed 12 percent last year as the Organization of Petroleum Exporting Countries and its allies trimmed supply to reduce a global glut. U.S. crude output is also slipping from a record-high, with weekly production falling through Dec. 22 for the first time since mid-October. Any interruption to Iranian supply would be a significant shock to the market. “Geopolitical risks are clearly back on the crude oil agenda,” said Bjarne Schieldrop, chief commodities analyst at SEB AB in Oslo. “As of yet, there is no deep-seated concern for a disruption” in Iran, but if that were to happen “it would have a huge impact on global crude oil prices.” Click Read More below for additional information.