Iran sanctions lead the many factors that might increase oil price to US$95 per barrel. John Kilduff from Again Capital told reporters that West Texas Intermediate is expected to implement the increase this winter.
Kilduff, the founding partner of the investment company and seasons trader told reports that the global market is tight and it is getting tighter. He added that the big strangle around the market right now is what's in the process of happening with Iran sanctions. According to him the Iranian barrels that the company was about to lose is surely going to hurt them. The loss will make a difference and it will tip the scale in his view to an upside surprise.
Opinions are varying about how US sanctions against Iran will make its impact on the oil prices. However, everyone agrees that the sanctions will produce negative effects. Some analysts say that Iran could result to the disposal of their products in secret markets so that they could reduce the country's exports to the minimum.
Report from the Bloomberg stated that Iran stopped tracking their tankers during the previous months of the sanction which resulted in accounted barrels of oil exports.
There are also reports that China and India have discovered a way to pursue purchasing Iranian crude despite sanctions. Chinese and Indian traders could simply switch Iranian tankers that are insured by Tehran. Chinese and Indian secret trades could also affect the oil price as a by-product of the Iranian sanctions.
Kilduff notes that Iranian crude oil exports are now in the stage of decrease and it will continue as November 4 approaches. Lots of investors are being depleted as oil refiners seek to stabilize their supply from producers and this is expected to cause an increase in the prices of oil.
It is also predicted that the same thing will happen to the United States. Kilduff cited that the rising demand for gasoline despite the increased price is because of the strong economic growth.
Killduff expressed his opinion about the demand for oil in the US. He stated that the fundamental picture of the oil demand in the US is the strongest that he has seen for quite some time. He said that the US government is providing jobs for everybody and almost all drives on the way to their jobs and they will continue driving no matter what the price of gasoline is.
