Économie

Geopolitical Wildcards Could Push Oil Beyond $ 70

Geopolitical Wildcards Could Push Oil Beyond $ 70

Two of this week’s rally-with Brent touching above $ 70 a barrel on Thursday for the first time since December 2014-and a sell-off of U.S. Treasury bonds in the middle of the week. The US Treasury bond sell-offs 10-year Treasury bonds 10-month high at above 2.5 percent. Generally, yields on Treasury notes go up when there’s less demand for them, and when demand is high. While a number of factors combined to push U.S. government yields higher, analysts suggest that the reason for this is the price rally. “We would argue that this is an important factor in the growth of our business.” “A team of Rabobank Strategists led by Richard McGuire wrote in a note on Wednesday, as carried by Bloomberg . The oil price also increases expectations and inflation this year, which is the primary cause of the U.S. bond sell-off, according to Rabobank. The 10-Year Breakeven 10-Year Treasury-10-Year Treasury Constant Securities-Moved Inflation above 2 percent This week, for the first time since March 2017. Much of that upward move can be attributed to the rising price of oil, Goldman Sachs’ co-Head of Global Macro Research Markets, Francesco Garzarelli, told CNBC this week. Related: Cold Snap Leads To Biggest U.S. Natural Gas Draw Ever According to Deutsche Bank, the inflation rate is expected to increase, but the bond sell-off is unlikely to continue. “When oil goes up inflationary expectations, even if they are long-term inflationary pressures,” Andres Garcia, CEO at Zoefin.com, told The Street this week, discussing the inflationary pressures. Garcia said, “The Fed now has to come into the marketplace,” said Garcia said. So where will go now? “Saxon Bank’s Head of Commodity Strategy,” Ole Hansen, said in an interview, said: “The market is telling us that we are in the market. article on January 10. While supplying disruptions and declining US and global oil inventories, US President Donald Trump’s imminent decision on Iran sanctions, and Venezuela teetering on the brink of collapse Hansen says. Now, as Brent toys with $ 70 and WTI with $ 64 a barrel, analysts say that there is not much room for further gains, barring conflicts and escalation of geopolitical concerns, of course. “John Kilduff, founding partner at energy hedge fund Again Capital, told” I think it starts to get tough, ” CNBC on Thursday as Brent briefly broke above $ 70 a barrel before retreating to $ 69.26. “I think we’re probably in the process of speaking,” Kilduff noted. Related: $ 60 Oil Will Not Last Long Middle East tensions, North Korea, more sanctions on Iran, and possible oil supply $ 80 a barrel , Citigroup said. Although $ 70- $ 80 OPEC’s oil-dependent budgets, Goldman Sachs, for example, has warned that the cartel would try to talk oil prices down if Brent tops $ 70, because of expectations of higher inflationary pressure and U.S. shale surging at those price levels. Since the beginning of the year, analysts have warned of a looming oil price correction , but at least in the first two weeks of January, bulls beat bears, and geopolitical concerns and declining inventories overrode the bearish concerns of U.S. shale production surging to crash the oil price rally party. By Tsvetana Paraskova for Oilprice.com More Top Reads From Oilprice.com:

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