Energy stocks mixed after tanker disaster

Friday, 14th June 2019 10:02 - by Rajan Dhall

Oil-based stocks have been having a hard time of late and it seems another spanner has been thrown in the works. 

Just yesterday two oil tankers were shot down in the Strait of Hormuz just by Oman. Due to the narrow corridor between the UAE and Iran, the place makes for the perfect place for a potential attack.

Iran has threatened to attack oil tankers in the area in the past but this time say they are not responsible for the attacks. Saudi Arabia however, have commented saying they believe the Iranians are responsible, while US president Trump declined to comment on the situation.

The problems for oil bulls do not stop there. This week's DoE and API inventory levels both increased in line with recent trends and OPEC have not yet decided whether the previously agreed cuts will be extended or deepened.

The daily WTI futures chart below shows material weakness in the oil price but the events yesterday led to a 2.19% rise in prices. The likes of Shell (RDSA) and BP have fallen in recent sessions as the conflict in the area may have a negative impact on their operations. I suspect the next twist in the tale will come from Washington. 

The Writer's views are their own, not a representation of London South East's. No advice is inferred or given. If you require financial advice, please seek an Independent Financial Adviser.