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President Trump has ordered his country’s Navy to “destroy” Iranian ships if they “harass” US vessels in the Persian Gulf.
The price of Texas intermediate oil (WTI) shot up 19.7%, to US $ 16.5 the barrel, after closing the session on Wednesday with another rally of 19.1%, while Middle East tensions drive prices and the limit on storage hints at a cut in production that could give some balance to the markets.
For his part, Brent oil, benchmark in Europe, is up 5% which brings it close to $ 21.4 a barrel.
Black gold prices have risen again and investors continue to focus on the foreign policy of the administration of US President Donald Trump, who yesterday ordered his Navy to destroy Iranian ships if she felt threatened in the Persian Gulf, what analysts have interpreted as a geopolitical move in a key area for the supply of crude.
Generally, according to experts, tensions in this area often lead to slowdowns in the production of the Persian Gulf, something highly desired in this context in which the global storage capacity is at the limit in a market “flooded” by excess supply and low demand by economic slowdowns and the containment measures in force in much of the world.
Low prices for US crude and a lack of space to store it invites investors to think that more closures will soon take place in American wells, which would mean that the United States could reduce its flow of oil and intensify cuts in world production, which has already undergone an adjustment following the agreement of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, which agreed to lower their pumping by 9.7 million barrels per day (bpd).
In this sense, another bullish factor in the opening was that the regulatory entities of Oklahoma, where the largest oil delivery point in the United States is located, announced aid to producers to close their wells.
Demand for crude from U.S. refineries is more than 4 million bpd lower than in the same period last year, a situation that is exacerbated as storage capacity is depleted, although producers are making room. at a rate “never seen before”, according to analysts.
Containment measures are estimated to have reduced demand by some 21 million bpd in the second quarter of 2020, according to data from Rystad Energy.
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