Oil price: crude oil markets ride out the short-lived volatilty
Investors and traders alike could breathe a sigh of
relief by the afternoon, yesterday, as the crude oil markets found its equilibrium
again, having been through a short period of volatility, the previous day –
finally.
It’s either the news of the sanctions against Iran
being lifted or the report from the IEA, the International Energy Agency that came
as a bolt from the blue, which was responsible for the mayhem in the markets;
some analysts believe it was the combination of both.
By afternoon on Friday, however, the indices were
back in the green and they continue to do so, extending well into the weekend.
As the conflict in the Middle East died down in
parallel to the news that came from Iran with regard to the lifting the
sanctions against the country, the markets in general got the much-needed boost
to spring back to action.
Although there was no official communique about a
new deal on the JCPOA, 2015 Iranian nuclear deal, the news from both camps that
comes in dribs and drabs clearly indicates that they have reached the point of
no-return; in another development, the supreme court of Luxemburg, the smallest
nation in the EU, ordered to unfreeze Iranian funds that were blocked last year
at the behest of the US; the court was of the view that the legality of such a
move lies with the local courts, not the international edicts, after all.
Since the indications of a sustainable growth in
demand of oil are still strong, the arrival of Iranian oil into the crude
markets in that proportion will not buckle the current trend of the oil price;
on the contrary, it helps the global economies bounce back from 2-year
stagnation due to the pandemic.
