The conflict in the Middle East may escalate further, as the United States intends to introduce further sanctions on Iran, said US President Donald Trump. This, in turn, may translate into the oil or gold market. Oil has gone up to the highest level for over three weeks.
Last week crude oil rose by almost 10%, which was due to the weak dollar following FED's meeting and macroeconomic projections, on the one hand, and the escalating conflict between the US and Iran. There have also been concerns about disturbing the transport of oil through the Strait of Hormuz. It came to this after subsequent attacks on tankers. The United States accused this attack of an OPEC member. What's more, Donald Trump decided to cancel the air strikes on Iran and introduce further sanctions after the Iranian army shot down the American drone. According to the state agency Tasnim, the Iranian navy warned that the shooting down of unmanned aerial vehicles could be repeated if the intrusion into its airspace continued.
It may also be disturbing statements of the President of the USA, who asked on Twitter: "why are we protecting shipping routes for other countries in the Strait of Hormuz? We do not even have to be there". These words may be perceived as an emphasis on the states of the Persian Gulf, because the absence of the US presence in this region could lead to a serious conflict in the Middle East.
The situation has become very tense, and two factors could influence the oil market again. One related to the trade war between the US and China and the other with the escalation of the conflict between the US and Iran. Therefore, volatility in this market may remain significantly elevated, and this week seems to be crucial for progress in both cases.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal Opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Trade this news from Conotoxia Ltd. platforms
Go to your account
