August Nymex WTI prices have bounced back from their lowest close in almost nine months, underpinned by speculation that an EU embargo on Iran, OPEC’s second-largest exporter, and a strike in Norway will tighten up crude supplies. Due to the industrial action in Norway, Norwegian oil production has fallen further, with cuts now amounting to 290,000 barrels per day (bpd) versus 240,000 bpd earlier this week. WTI prices also received a boost when EU leaders unveiled early Friday a plan for a single financial supervisor for the region, as part of a short term measure to stabilise markets. European Commission President Herman van Rompuy said that the mechanism will involve the ECB and that there will be the possibility of direct recapitalization for Europe’s troubled banks. The announcement triggered a positive reaction in equity markets and the euro which, in turn, helped underpin support for WTI prices. WTI held at lows of $78.28 a barrel early on during Asian traded hours, and prices advanced up to session highs of $79.48 after posting their lowest close since Oct 4 Thursday. WTI last $79.47, up $1.78.
EasyForexNews Research Team