The recent geopolitical tension in the middle east led to upward pressure in the price of crude oil in the international market.
Investors feel that the outbreak of violence between Israel and Palestine in the middle east may cause supply disruption of crude oil.
This caused oil futures to rise over 2 percent in recent trading sessions and it was reportedly trading at its highest price since mid-October.
However, a sharp rise in the price was prevented by the downgrading of government bond rating by Moody’s. Moody’s became the second of the three major ratings agency to downgrade France’s top rating. This increased worries about the recovery of the economy.
New York’s main contract, light sweet crude for delivery in January, was trading around $88.97 a barrel and Brent North Sea crude for January delivery was trading around $111.52 recently.
Traders are keenly watching developments in the US related to the impending fiscal cliff for further cues. US is the world’s biggest oil consumer.
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