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Crude Oil News: Volatility Expected to Remain High
Pinnacle Digest writes: The selloff in crude oil since mid-June continued Monday as global economic concerns begin to peak. Sluggish economic prospects for nearly the entire western world, has crude oil hitting new 10 month lows. Crude oil has lost 29% in value from its 2012 high of $110 per barrel.
Oil collapsed on June 21 when Moody's Investors Service downgraded 15 of the world's largest banks and US Manufacturing hit an 11 month low. The United Arab Emirates have begun distributing oil through a new pipeline which stretches from Abu Dhabi to the port of Fujairah in the south-east of UAE. This is reducing the threat of an Iranian closure to the Strait of Hormuz, if Israel or the United States were to attack the country's nuclear facilities.
In early 2012, Saudi Arabia increased its production quota to 10 million barrels per day. This has led to outright dissent within OPEC. Ebeling reminds us that the deadline of July 1, when all EU states discontinue importing crude from the Islamic Republic of Tehran is rapidly approaching. What impact this will have on oil is yet to be known. Saudi Arabia clearly agreed to play hard ball with OPEC while maintaining its close ties and relationship to the US. Obama will no doubt be paying the Saudis back in spades if he is re-elected.
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