Crude oil futures rose to a seven week high owing to rising tensions between the United States and Iran, along with expectations about the US Federal Reserve increasing the stimulus in the US economy. Brent crude futures increased by 0.29 percent to be at USD $ 103.670 per barrel, while WTI crude futures rose by 0.16 percent to be at USD $ 88.570 per barrel.
On the last leg of her twelve country trip in Israel, US Secretary of State Hillary Clinton stated that the United States would use “all elements of American power” to prevent Iran from developing its nuclear technology. In retaliation to the sanctions imposed on it, Iran has threatened to close down the Strait of Hormuz, from which one-fifth of the world’s oil supply passes. These hard talks have raised fears about supply getting disrupted in the near future, due to which oil future prices have been fluctuating lately. Ms. Clinton’s latest comments have risen the speculative buying in the market, due to which prices have risen.
A report released by the US Commerce Department showed that sales had decreased in the month of June. There is a general consensus that the US Federal Reserve might launch another round of Quantitative Easing, a program under which asset buying was fostered while reducing the cost of borrowing. In this way, Quantitative Easing is supposed to inhibit economic growth.