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May 21, 2012 -- Updated January 22, 2012 11:45 HKT

Oil and Iran

Brent Crude Oil price has remained strong, trading above 110 bbl for most  of January 2012, despite lingering sovereign debt problems and increasing  likelihood of recession in the EuroZone, as well as fragile economic condition  in the UK.
The strong-price phenomenon has likely been support by tensions over Iran.  The latest forecasts from the IMF and the World Bank says that the EuroZone will  enter recession in Y 2012.
Tensions over Iran has masked the deteriorating condition in the price  of Crude Oil in the short-term.
The EU’s eventual embargo against Iranian imports would be detrimental  to growth in the region. Iran is the 2nd largest Crude Oil supplier to  Europe, shipping around 20% of Crude Oil to Italy, Spain, Greece and France  annually.
Suspension of Crude Oil supply from the 2nd largest OPEC supplier  should send Crude Oil prices higher, and increase the burden of these  countries. Higher Crude Oil prices could deepen Europe’s recession.
Recent strength in the USD has made Crude Oil prices in EUR and GBP terms  even higher. The huge Crude Oil burden is expected to exacerbate the economic  growth in the region. Eventually, contraction in economic activities would  reduce the demand for Crude Oil and send prices lower.

Paul A. Ebeling, Jnr

Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster’s Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.

Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.
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Posted by on Jan 22nd, 2012and filed underEnergy, Latest News, Oil, Oil.You can follow any responses to this entry through theRSS 2.0Responses are currently closed, but you can trackback from your own site.

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