Oil Rise Result of Various Factors

A recent rally in oil prices to multi-year highs is about much more than the deepening crisis in Syria, analysts told CNBC Thursday.

Crude futures soared to highs not seen since December 2014 on Wednesday, underpinned by greater geopolitical uncertainty in the Middle East and heightened concerns over the prospect of imminent military action from Western powers. Ample crude supplies had pared some of the gains on Thursday, though crude futures remained in touching distance of levels not seen in more than three years.

West Texas Intermediate graph

“I think certainly some of what we are seeing is a little bit of geopolitical premium (but) I don’t think it is just about Syria,” Richard Mallinson, geopolitical analyst at Energy Aspects, told CNBC’s “Street Signs” Thursday.

Instead, Mallinson argued crude futures had soared to multi-year highs on the back of two main price drivers — concern over the “wider ramifications” of heightened geopolitical tension in the Middle East and the looming prospect of the U.S. withdrawing from the Iran nuclear deal.

Oil prices slipped away from 2018 highs on Thursday, with global benchmark Brent trading at $71.15 in early afternoon deals, down 0.8 percent, and WTI trading at $66.38, around 0.6 percent lower.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza