August Nymex WTI prices have corrected modestly overnight in Asia after Tuesday’s bumper session saw prices rise a staggering 4% to post a close of $87.66, the highest since May 30. WTI surged as fears over Iran intensified on a large scale Monday, after the local media suggested that the country could disrupt the passage of oil tankers in the Strait of Hormuz, a key waterway for oil trade. The US has reinforced its forces in the Gulf, whilst Iran said on Tuesday that it had successfully tested medium-range missiles capable of hitting Israel as a response to threats of attack, the latest move in a war of nerves with the West. The flare-up took most market participants of oil by surprise, with some shorts being forced out of the market, adding fuel to the already surging rally in WTI. Prices also remain underpinned by the workers’ strike in Norway, which, according to estimates, has cut the country’s output by 13% of capacity. Norway is the globe’s fifth-largest oil exporter and its supplies have a particularly large impact on the Brent oil market.
EasyForexNews Research Team