Commodities | Dec 01 2011
In the past, as can be seen from the chart below, when issues concerning Iran emerge we have seen increases of between 15 to 30% in the price of oil. The response so far seems to be surprisingly muted. We suspect that given the lack of response from the market investors believe that Iran is just bluffing and the requirement for external assistance to help its ailing economy has precedence. If you exclude oil from Industrial Production the economy is going backwards -1.1%. Let’s hope we do not see any desperate measures taken by Iran. It’s a nervous time.
Chart Point:
Technically, the market has failed to push lower having bounced back though the downward trend line. This indicates that the market is not ready to trend lower and as a result we look towards the market trading back in the range and testing the topside of US 103.75. Our experience in trading Oil suggests we keep an eye on this level as if it is broken the chances are that it will continue towards a new and higher range. If short, stops must be placed above there to. Momentum indicators remain mixed for us.
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