Oil: Saudi and Iran clash to guide the immediate future – BBH

By FXStreet FXStreet (Delhi) – Research Team at BBH, suggests that before the tensions rose between Saudi Arabia and Iran, there were four big developments in the oil market at the end of last year.

Key Quotes

“First, not only did OPEC fail to agree to cut output to support prices, but it also failed to provide any quota. Its failure to agree on a new General Secretary has also left the impression of a cartel in disarray. Second, as part of an omnibus fiscal bill, the ban on US crude oil exports will be lifted.

Third, the ban on Iraqi oil sales will also be lifted, it appears, as early as the middle of this month. Fourth, thus far, at least, it has been an unusually warm winter in most of the US. This reduces heating oil needs. On the other hand, flooding in the Midwest is threatening pipelines, likely adding to inventories.

Now, the New Year has begun with tensions rising between Saudi Arabia and Iran. The market was vulnerable to a short squeeze, but it remains to be seen if this has run its course already. The flooding is likely to prove …read more

Source:: FX Street