Oil Prices Shoot Higher on Saudi Crisis

The oil prices rose higher by more than 5% as events in Saudi Arabia dominated the headlines in the oil markets and drove the prices higher on supply concerns. Saudi Arabia is one of the most important members of the OPEC and is also one of the largest suppliers of oil. It is a highly oil dependent economy and over the weekend, there has been a lot of political turmoil in the country. The Saudi Arabian ruler ordered the arrest of several top leaders, including some princes, in a move that is seen as taking over more control of the government in the region. This has increased the uncertainty in that region and led to concerns on whether they would be able to maintain the oil supply according to the prescribed levels in the short term.

Oil Prices Looking for $60

This is something that is important for the OPEC and the rest of the world as the other oil producers have already reduced the supply to low levels and any further disruption in the oil supply could cause some serious problems. This has brought out more bulls in the oil markets and pushed the prices through the $57 region where it trades comfortably as of this writing. With this, the oil prices have breezed through the $55 target of ours and continues to be bullish, something which we have been advocating ever since the oil prices made a low in the $44 region a few months back. The prices seem to be set to move into the $60 region in the short term with $55 region serving as some short term support.

Gold prices also rose higher as tensions in North Korea are likely to resurface once again. The dollar has also been on the backfoot over the last 24 hours and this has helped the gold prices to test the orders in the 1280 region and it trades just short of that region as of this writing. Trump is making a visit to the Asian region and it is likely that North Korea might carry out a nuclear or missile test just as a show of strength when he is in the region. This has increased tension and risk and helped the gold prices to move higher and this is likely to continue to be buoyed in the short term.

Silver prices have also moved higher as expected, through the $17 region and trades comfortably above that as of this writing. The prices have been buoyed by the increase in global risk and the weakness of the dollar.