Lifted by the effort of Saudi Arabia’s crown prince: Mohammad bin Salman to tighten his grip on power and rising tension between Saudi Arabia and Iran, prices of oil posted their robust gains in six weeks indicating prices hovering near a two-and-a-half year high. However, prices of oil was seen sliding on Tuesday; the international benchmark: Brent crude futures, settled at $64.08 a barrel, which was 0.3% or 19 cents lower from their last settlement.
The United States West Texas Intermediate crude traded at $57.25 a barrel, which was 0.2% or 10 cents lower from their previous close, in which WTI was boosted by 3% and was considered as the U.S. crude’s biggest percentage gain since late September.
Meanwhile, in accordance to the news regarding Saudi Arabia’s crown prince, tensions between Saudi Arabia and Iran heightened. This is after a missile was fired toward Riyadh on Saturday. The country (Saudi Arabia) as well as its Gulf allies have claimed they see Iran as responsible for the Yemen conflict, in which Adel al-Jubeir: Saudi Arabia’s Foreign Minister announced that his country reserves the right to respond to Iran’s actions, while Mohammad Javad Zarif: Iranian Foreign Minister commented that Saudi Arabia was blaming Tehran for the consequences of its own wars of aggression.
In accordance to this, Shane Chanel, equities and derivatives adviser at ASR Wealth Advisers, said in an email that a potential conflict could limit significant supply crude supply out of the region, in which they see the United States WTI crude above $60 and may even see the international benchmark (Brent crude) above $70 by the end of 2017.