After a month of relatively cooler global crude oil prices, the focus has again shifted back to Iran. Crude oil, after having dipped for seven consecutive trading days, showed signs of resurgence yesterday, as Iran is entering the negotiations phase with the major market players. The eurozone crisis has so far managed to keep the oil price in check despite the narrowing gulf between supply and demand. But, majority of the analysts believe that crude oil price has bottomed out already and there is not much room further below the current level. Recent numbers released by the US indicate the economy is steadily on the path to recovery and the American oil demand is likely to stay strong in the near future. Moreover, China continues to grow aggressively and the expected 8.5 percent growth in Chinese economy will fuel the oil futures. Goldman Sachs in its latest reports on oil hinted on a considerable rise in oil prices. "Despite concerns over the softening economic data, oil demand continues to improve... the supply of oil actually available to the market is increasingly constrained by the inability of Iran to market its oil owing to the effects of US and European sanctions", read the Goldman report. Iran has warned the world that should the European Union go ahead with the embargo in July, it will have serious consequences in the form of a massive crude oil price hike. Irans Finance Minister, Hosseini, in a recent interview with CNN signalled that oil prices could reach $160/bbl should Iran be stopped from trading oil. Recall that IMF, earlier in the year warned that global crude oil price could rise by as much as 30 percent if Iran halted oil exports as a result of US and EU sanctions. Although, Iran has of late shown willingness to allow the UN to inspect its nuclear power arrangements - the US has reaffirmed its strict stance on Irans nuclear programme, which will certainly act as a premium to oil prices in the near future. From what it seems, there is a broad consensus in the market that EUs economic woes alone will not keep the oil prices under $100 a barrel for much longer as other variables have a more significant wieghtage in determining the fate of crude oil, of which Iran is a major factor.
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