Tags: Nomura | Newton | oil | Iran

Nomura: ‘Crescent of Chaos’ in Middle East, North Africa Will Cause Oil Prices to Jump

Wednesday, 10 Apr 2013 08:03 AM

By Michael Kling

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
A “crescent of chaos” running from North Africa through the Middle East will prompt a sharp jump in oil prices, warns a Nomura analysis.

Nomura predicts that Brent crude oil will rise after presidential elections in Iran, according to CNBC.

“It would be wrong to single out Iran to the exclusion of all other drivers of the price of oil in the [Middle East and North Africa] region, however, it has certainly been the most important,” said Nomura analyst Alastair Newton, CNBC reported.

Editor's Note: This Wasn’t an Accident — Experts Testify on Financial Meltdown

“Once the Iranian presidential election process is over and especially if talk about a decision on military action being needed in October persists — markets may see an increasing risk of an early strike against Iran which could start to push up oil prices accordingly,” Newton said.

Brent crude oil jumped to $128 a barrel in March of last year, he noted, due to speculation that Israeli Prime Minister Binyamin Netanyahu would order a strike against Iran’s nuclear facilities during the region’s favorable weather conditions from January to April.

Iraq poses another potential danger, according to the analysis. Iraqi oil production has increased by 50 percent from since 2002, and is predicted to continue rising from 3 million barrels a day to 6 million barrels a day by 2020.

“That said, we continue to believe that persistent security-related concerns do act as a disincentive to investment in new output,” Newton told CNBC, “even though the arguably unique opportunities which Iraq’s massive oil reserves present remain very attractive to foreign oil companies.”

Oil prices have been held down by concerns of a weak economic recovery and high inventory levels, according to Reuters.

The American Petroleum Institute reported that crude inventories increased by 4.7 million barrels in the week ending March 29, substantially higher than estimates.

“The U.S. economy took such a body blow three, four years ago with the financial crisis, it’s like a patient that’s been hit by a car, it’s going to take a long while for it to recover,” Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois, told Reuters.

“And if the patient is in such shape, it is going to take time for us to start seeing demand actually growing to levels before the financial crisis.”

Editor's Note: This Wasn’t an Accident — Experts Testify on Financial Meltdown

© 2014 Moneynews. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink

 
Email:
Retype Email:
Country
Zip Code:
Privacy: We never share your email.
 
Follow Newsmax
Facebook
Google Plus
You May Also Like

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved