Last week, crude prices gained a seven-day streak, when they rose to eight-week high. This was neither due to any brightening-up signs of the global economy nor any refreshed demand for oil. After a long downward voyage, oil prices have retreated once again. A sudden escalation in Iran-Israel tension due to the two bombing, almost simultaneously, has fanned frenzy among the investors on supply concerns. With the spiraling down of Syria and the Israeli authorities blaming Iran for the attacks on the Bulgarian bus, the unrest was bound to spill into the oil market. It is truism that a panic in the middle east, whether it is an oil producing country or not, stirs up the oil prices, primarily due to their proximity to the oil reserves. And now the news about Iran planning to disrupt the international oil trading by attacking oil bases, not only in the Persian Gulf but also outside, is another fear that can rattle the already endangered oil supply. If it is not the countries screaming more for more oil, then it is definitely a warning sign for the global oil market. What pushed up the oil prices during last week is the fright that the Middle East is facing, and any further price escalation is undoubtedly going to be a premium for further deterioration in the region. But, a lot of this also has to do with uncertainty. Headlines about the LIBOR gossip, eurozone drama and global recession are momentous for the oil market, and that is what an astute oil investor looks for. On the flip side, if Greece, Spain or Italy starts misbehaving more than the Middle East, all gains would turn into pains for the investors. It will be no surprise if the prices start to tumble once again on eurozone concerns overtaking the troubles in the oil producing region. This is exactly what has happened. After a weeks surge, the world oil prices slipped amid eurozone worries as Spains cost of borrowing climbed to new heights, weakening the euro further. The global oil market certainly runs on uncertainty.
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