Oil prices have risen again because of a stalemate in talks intended to resolve the standoff with the West over Iran’s nuclear programme. In addition a tropical storm is threatening fields in the Gulf of Mexico. That ended last week’s sell off, but was not enough to sustain a recovery in prices.
Oil’s losses last week were the biggest in dollar terms since futures began trading in New York in 1983 and in percentage terms were the steepest sell-off since late 2004. A war of words between Iran and the West has contributed to tensions in the Middle East that helped to push oil prices to a record high of $147.27 on 11 July before last week’s sharp correction.
Another worry for traders is Tropical Storm Dolly, which is headed for Mexico’s Yucatan Peninsula and the border with Texas. Dolly, which is the fourth storm of the 2008 Atlantic hurricane season, is threatening to strengthen into a hurricane and could pass close to Mexico’s huge Cantarell oil field which is a top supplier to the United States.