Oil Prices Skyrocket Due To Turmoil In Egypt

Oil prices moved steadily up yesterday on continued turmoil in the Middle East and the threat of disruptions in the transportation of Oil from the region. NYMEX, New York crude, is up 4%, trading at USD 101 a barrel. Brent crude raised to USD 105.75 after the Egyptian military ousted elected president Mohammed Morsi.

The military coup came after demonstrations and clashes between supporters and opponents of Morsi. President Morsi’s opponents welcomed the military intervention. The unrest in Egypt threatens the stability in the whole Middle East. Egypt is the most populous state in the region, and borders with Israel. Gold and Silver, which have fallen steeply over the last few months also gained on the development, as did the Japanese Yen. The USD/JPY trades at 99.93, the EUR/USD at 1.3003.

The U.S. market was focused on the jobless claims which came in 5000 lower than last week. Unemployment data for June is slightly better than May, falling to 7.5 %. This is still far from the 6.5% the U.S. Federal Reserve (FED) has set as a target for ending quantitative easing. Presented numbers on trade and services were disappointing, and do not point to a quick turnaround in the American economy.

The Dow Jones and Nasdaq ended up, after a short and volatile session prior to closing for the 4th of July Independence celebrations. The Dow was 12 points short of breaking the 15 000 level. European markets were weak after the recent turmoil in Portugal, where several ministers including the influential Minister of Foreign Affairs threatened to leave the government. The political crisis has revived fears of a Portuguese debt crisis. In Greece there are questions whether the Samaras-Government will be able to live up to the obligations set by the troika, which put pressure on European equity markets as well as the euro.