| News | Crude oil around $103.00 on tensions over Iran |
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| Analysis | After Europe planning to ban imports of Iranian oil in an attempt to increase the harsh sanctions against Iran over its nuclear program, crude oil reached as high as $103.72 while Brent rose to the highest of $114.66. Yet as the US dollar strengthened oil started reversing its gains. The renewed worried over Europe's debt crisis and its repercussions on the global economy increased demand on the safe haven USD, which is trading around 80.75. This pushed crude around the $102.75 level, however the unexpected rise in US private sector jobs manage to improve risk appetite and brought crude above the $103.00 level, especially as the euro continues to be weak at 1.2810. The ADP employment change indicated that the US private sector added 325 thousand jobs in Dec, from 178 K expected, while the initial jobless claims fell last week more than expected to 372 K from 381 K previous. This outcome improves the prospects for the non-farm payrolls numbers on Friday and indicate that the US economy is doing better than previously expected, which improve the outlook for global growth as well. The tensions over Iran's still give crude an upside pressures as prices might skyrocket if Iran will shut the Strait of Hormuz to shipping. Crude oil is trading as of this writing around the $102.95 per barrel level. More upside pressures to oil is imposed by the problems in Nigeria, after the government removed at the start of 2012 gasoline subsidies, triggering protests and calls for strikes by trade unions, which could disturb supplies. |
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