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Oil supported on Middle East Tensions and rising demand forecasts

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Crude prices are trading sharply as international tensions soar in the Middle East and on fresh stimulus signals from the Fed.  Iran is showing they are still able to rattle oil markets with the downing of a US drone.  Iran claims the US drone entered in Iranian air space, while the US firmly denies that it is the case.  Iran’s media said the drone was shot down near Kuh Mobarak, on Iran’s southern coast, which is just next to the entrance of the Persian Gulf.

Oil prices are out of bear market territory and appear well supported here.  With demand forecasts receiving some relief as dovish signals are now strong expected to come from both the Fed and ECB.  Demand forecasts could also get another boost if we see a positive outcome with the US – China upcoming trade talk at the G20 summit in Japan.

Crude prices are also being supported as OPEC and allies were finally able to settle on a date to meet and the three biggest producers (Saudi Arabia, Iraq and UAE) are set on extending production cuts for the rest of the year.

West Texas Intermediate crude is higher by 4.9% and Brent is up 3.7%.

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Ed Moya

Ed Moya

Contributing Author at OANDA
With more than 20 years’ trading experience, Ed Moya was a Senior Market Analyst with OANDA for the Americas from November 2018 to November 2023. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Prior to OANDA he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
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