Oil Market fears of a military clash between the US and Iran

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The tense situation between the US and Iran have a negative pressure on oil prices. Because the major participants receive inconsistent signals, they have to fix the futures contracts to minimize the risks. Such actions of large investors lead to the fact that in the moment we can see the drop in oil prices. However, in the baseline scenario, prices a priori to grow.
Saudi Arabia has said it will not allow a military clash between the US and Iran and is ready to reconcile the country, as the military operations on the territory of oil-producing countries are not the most sensible solution. Iran is also against the bloodshed and damage to its economy, as the United States. However, States are eager to show the world its power, that is not news.
In this regard, the price of Brent is located at $71,85 per barrel and shale oil WTI – $62,51 per barrel.
The oil market is still full of uncertainty because of the conflicting factors affecting it. But the main is the reaction of major market participants on the interpretation of a news background. I would not recommend actively buying oil futures because of more attractive at the moment prices. In such difficult conditions we can still observe continuation of the correction.
Investors are focused on the forthcoming meeting of OPEC in Vienna. There will be decided the question of the stabilization of the global oil market. In my opinion, the decision is made to continue the production cuts. While Russia may revise the agreement and begin to increase oil production.
Published data from the American petroleum Institute about the growth of inventories also weighed on prices. The data was above expectations. It was stated 2.4 million barrels, though many participants assumed the figure of 600 thousand barrels.
Tonight will be known to the official data from the energy information Administration of the United States. It may add a slight volatility in the global oil market.
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Gaidar Hasanov
Expert
“International financial center”