Middle East pressures support oil

Weekly Report - 23/09/2019

Oil Rises


While Middle East pressures continued to increase, the Oil rose more than 1% and marked its highest level in two days.

The Pentagon has authorized an extra number of military troops to be stationed in the Gulf area to increase the strength of Saudi Arabia’s air and missile protection after an assault on Saudi oil plants.

On Sunday Mike Pompeo the U.S. Secretary of State announced that the troops are for “deterrence and defense” and the U.S. pointed out that it wants to avoid a war with Iran. The U.S. West Texas Intermediate crude futures went up 69 cents, to $58.77 a barrel while Brent crude futures reached an intra-day high of $65.49 a barrel.

The Week that was

Last Friday, the USD remained weak against its major rival currencies while central banks in the UK and Switzerland adopted a different plan from the Federal Reserve's policy on cutting rates. All this as risk appetite faded over caution regarding U.S-China trade talks. GBP went up to a 60-day top of $1.2559 versus the greenback last night following Jean-Claude Juncker the President of the European Commission that said he believes Brussels can agree with the United Kingdom.


Main Focus This Week

On Monday, the Greenback continued to be supported by cautiously balanced investors’ risk desire following discussions in Washington between U.S. and Chinese trade agents. The discussions were characterized as “productive. “It’s very important to watch the developments regarding the trade war due to the effects that they have on the popular greenback. The greenback gained versus the safe-haven yen but fell versus the New Zealand dollar and Australian dollar. Moves were comparatively small, but, with volumes depressed by a public holiday in Japan and by the expectation that central banks on both sides will appear more dovish, this week is probably going to be interesting.


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