Oil prices are beginning to edge up as traders scramble to get in on the trade as the United States and China combine forces to rein in Iran, the Middle East’s leading nuclear power. When both countries agree to halt all enrichment activities and impose a de-nuclearization agenda in place of those activities, Tehran could lose billions of dollars. Expect to see oil prices reach new highs. If Iran doesn’t move to a more peaceful uranium program, all bets are off and prices could fall again.
The rising crude oil prices are not good news for those who try to leverage into the spot market to cut their cost, but that will certainly change now that both countries are on the same page. This much needed dialogue is good news for investors, but the new direction will not cause oil prices to rise.
It is easy to see why investors are afraid to get out of their investments, but now the news is affecting rental prices, resort owners and timeshare purchase plans. If oil prices continue to rise as we hope, we’ll soon see signs of that growing equity market that will be trading in the months ahead.
When you think about it, crude oil prices were higher when the two countries first broke up. Those spikes in oil prices were due to security fears and also lowered oil prices will create a lot of volatility to global stock markets. We’ll see.
If the United States and China do indeed join hands on an international decision, it is no surprise oil prices are on the rise. Let’s see if OPEC meets its agreement this week, but by that time, things will start to settle in and eventually we will see an end to that political turmoil.
More analysts are sounding the alarm about the risks of instability around the globe, and many of them are saying that crude oil prices will peak as a result. The rise in oil prices is certainly an ominous sign.
The oil markets and the prices of those oil trades certainly are headed higher. The rally in oil prices was a very one-sided rally, and it shows no sign of letting up. Hopefully, oil prices will stay in the $100 range.
When oil prices begin to rise, this signals a peak in crude oil production as well. There’s no point in increasing oil production when prices are already so high, and prices will only continue to rise in the future.
If oil prices reach $50 a barrel before summer, that would be a very risky move by any investor to buy into the crude oil markets as the prices are expected to continue to climb. On the other hand, if oil prices remain below $30 for the rest of the year, that would suggest that traders are getting burned by investing in the oil markets.
Optimistic for the moment, I have seen many traders tell me that they see oil prices around $70. That is about five times the level that the Dow Jones is trading.
Oil prices can rise very high when the news is on the wall that Iran is on the verge of military action. In addition, there are other indicators of trouble with Iran. One of those is for Western banks to tighten the screws on their Iranian business associates.