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Oil Heading for Best Week Since July

April 13, 2018 at 15:32 by Matt Jackson

Following a geopolitically tumultuous week, oil prices have posted yet more gains to give them their strongest weekly results since July 2017. The increase in price comes as the world prepares itself for potential action against Syria, following the alleged gas attack in the country.

Concerns grew as Russia, Syria’s military ally, stated that they would retaliate against any missile strikes that posed a risk to their forces in the country. Western leaders, led by the USA’s Trump and backed by the UK’s May and France’s Macron, have made strong statements condemning the gas attack and indicating that they would take action. Over the course of the week, Trump’s tweets have caused investors to panic about the possible availability of oil in the event of a war in the region and amid escalating tensions with Russia, pushing prices higher and higher.

Although daily prices retreated slightly on Thursday, they recovered to remain at their highest level in three years. Prices have continued to rise further on Friday, with Brent crude trading at $72.35, an increase of 0.46% on yesterday’s prices. WTI crude increased 0.21% to trade at $67.21 at 16:00 GMT.

The latest turmoil has led Goldman Sachs analysts, who predicted that prices would top $72 by the end of the week, to come out as very bullish. They said:

“With low cross-asset correlations, increasing inflationary risks, a positive carry and the potential for oil supply disruptions in the Middle East, the strategic case for owning commodities has rarely been stronger.”

A sentiment that the market clearly agrees with.

Meanwhile, sanctions imposed by Trump against Russian manufacturer Rusal have been felt across the board, with alumina, the base ingredient for aluminum, rising 30%.

If you have any questions and comments on the commodities today, use the form below to reply.

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