On March 22, oil prices fell, after multiple explosions in Brussels caused investor nervousness.
Several explosions have rocked Brussels, the capital of the European
Union this morning, at the airport and the public transportation system.
So far 21 have been confirmed dead at the two sites by Belgian fire
brigade authorities.
Oil had risen earlier in the session following a drop in US inventory
levels, easing supply glut concerns. Brent crude futures LCOc1 fell 14
cents to $41.40 a barrel by 0909 GMT, having risen to a session high of
$41.75, according to Reuters. Brent has gained more than 50% from
12-year lows hit in January. US May crude futures CLc1 were down 11
cents at $41.41 a barrel.
“What happened in Brussels will put a flash of fear through the
markets generally because they suddenly realise that, of course,
terrorism hasn’t gone away so they are fearful what could actually
interfere with the already sensitive global economy because if that
could interfere with confidence then that would impact on the economy,
that would impact on the oil price,” Justin Urquhart Stewart, director
at Seven Investment Management, told New Europe on March 22.
The oil price has tried to see some recovery but there is no strength
or momentum to it at the moment, he said. Members of the Organization
of Petroleum Exporting Countries and non-members, including Russia, plan
to meet on April 17 in Qatar to discuss an output freeze. However, Iran
has said it will not freeze production until it reaches a pre-sanctions
level output.
As investors sought safety, gold rose 0.7% to $1,250 an ounce, while
the yield on 10-year German government bonds fell 0.03 percentage point
at 0.19%, according to Tradeweb, cited by Dow Jones.
Urquhart Stewart said there has been more movement towards gold. “But
you can see every time that there is a little bit more confidence the
gold price weakens off again. And remember the big problem with gold is
you get no compounding of interest. I always regard gold as a little
teddy bear made of gold. You can put it next to your pillow and stroke
it but that’s all you get out of it,” he said.
Urquhart Stewart said the deadly Brussels blasts “could be a real
game changer” and help advocate the case in favour of the United Kingdom
staying in the European Union.
He noted that intelligence seems to be being shared and coordinated
throughout Europe, particularly using some of the British intelligence
services as well. “That will actually help the anti-Brexit people in
saying that we need to be part of Europe, stay in Europe because with
the security issues we are better and stronger and safer together,”
Urquhart Stewart said.
http://neurope.eu/article/brussels-bombings-sink-oil-prices/