January 27, 2023

Oil prices rise amid Iran-west tensions

LQDFX Forex news Blog Oil prices rise amid Iran-west tensions

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Oil prices rise about 1% on Thursday after Iran said it had seized a foreign oil tanker in the Gulf. Tensions rise between Tehran and the West over the safety of shipping in the Strait of Hormuz, a vital gateway for energy exports.

Iran said the vessel, which it did not identify, was smuggling fuel and had been carrying around 6,200 barrels. Iran said the vessel impounded was the same one it towed on Sunday after the ship had sent a distress call. U.S. officials said they were unsure whether an oil tanker towed into Iranian waters had been seized or rescued.

Britain urged Iran to ease tensions in the Gulf, while pledging to defend its shipping interests in the region.

Oil had fallen on Wednesday in response to a sharp rise in U.S. stockpiles of products. Gasoline pointed to weak demand during the U.S. driving season.

Further, from the U.S. EIA data showed a larger-than-expected drawdown in crude stockpiles last week. However, traders focused instead on large builds in refined product inventories.

Experts expect slower demand growth due to a weaker-than-expected global economic backdrop.

Brent crude futures were up 48 cents at $64.14 a barrel by 1148 GMT after hitting a session high of $64.46. WTI crude futures were up 33 cents at $57.11 after the U.S. benchmark hit a session high of $57.32.

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Forex – Oil prices rise amid Iran-west tensions

The weakness in the dollar pushed other currencies higher. The Australian dollar led gainers thanks to a solid jobs report.

The dollar slipped for a second day against its rivals on the back of softer U.S. Treasury yields after weak housing data. Investors geared up for a policy meeting next week where officials are set to cut interest rates for the first time in ten years. Against a basket of its rivals, the dollar edged 0.1% lower to 97.09.

The Australian dollar drew a significant part of its support from the June underemployment rate. The Aussie was 0.3% higher at $0.7031.

The euro fell on Tuesday after signs of deteriorating sentiment among German investors. However, the prospect of more central bank easing meant another day of small, contained currency moves. The euro weakened 0.2% to $1.1239.

The pound rebounded on Thursday after stronger-than-expected retail sales numbers. The British currency found some support from a vote by lawmakers to make it harder for the next prime minister to try to force a no-deal Brexit. The pound dropped to a 27-month low against the dollar and a 6-month low versus the euro.

The pound rose 0.5% to as high as $1.2494 before slipping to $1.2475 by 1310 GMT. Against the euro, sterling rose as much as 0.5% to 89.795 pence. It had hit a six-month low of 90.51 pence on Wednesday.

PLEASE NOTE The information above is not investment advice.

Sources: Reuters, Investing, CNN money