A slew of factors are sending oil prices above $103/barrel this morning. Tensions have grown between Iran and Western countries over their nuclear program with Iran threatening to close the Strait of Hormuz if its oil exports are impacted by U.S. and European sanctions.
Country wide protests in Nigeria over high fuel prices and government corruption has also sent crude higher today. Nigeria’s oil production appears to have been unaffected, but that could change as unions representing the oil workers have pledged to strike.
An improving U.S. economy will also send oil prices higher as demand will increase. Investors will be watching fourth quarter earnings from major companies starting this week to get a gauge of how well the economy is doing. “Oil feels like a market that wants to head lower but is being precluded by a steady tone to equities, particularly within the U.S. where good economic news continues”, energy analyst Ritterbusch and Associates said in a report.
China is seeing a six percent annual rise in oil imports. There was also a report out of Germany that China has reduced its imports from Iran.
“Because China has recently much reduced its imports from Iran due to disputes over payment, the country will need to source its demand elsewhere, which could drive prices further upward,” said a report from Commerzbank in Frankfurt.
Crude oil for February delivery is currently trading up 1.79% at $103.12.