Tentacles of Positve Sentiments Run across the Oil Markets

oil surge


Oil surge continues as investors feel that the demand is back on track and it’s finally irreversible regardless of the bad news on the Coronavirus front with the discovery of new variants.

Investors seem to be particularly buoyed by the projected increase in demand by two leading developing countries in Asia, India and China, as the respective economies show healthy signs of recovery.

Although activities in the South China Sea involving the world’s two biggest economies is a concern, the investors know that it will never grow into a mutually-suicidal military confrontation in spite of the spectacle of sabre-rattling.

Since the US aircraft carrier was moved away from the Strait of Hormuz recently and Iran’s rhetoric has toned down somewhat, we can sense that the political manoeuvres may be already underway between the long-time enemies; the US move to delist Yemen’s Houthis as a terrorist organisation is also significant in this context.

Houthis have been targeting Saudi oil fields and airports with missiles. The friendship between the Saudis and the US administration, meanwhile, does not seem to be at its best at present.

The US had demanded that Houthis stopped attacks against the Kingdom, though.

Iran, the regional rival of Saudi Arabia, may have seen an opportunity amidst the rift between the US and Saudi Arabia. The latter appears to have felt the pinch already: it restored ties with Qatar against all odds; it plans to release woman activists; it may get out of costly war in Yemen too.

These political developments decrease the tension in the world in general and in the Middle East in particular; this is what any investor wants to hear, not just the crude oil investors.

Crude oil markets react to positive sentiments and the steady rise has been reflecting this for the past nine days.



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