Brent Caught Between a Cliff and the Middle East
Brent crude oil prices are sandwiched between $110 and $111 as support from tension in Egypt and Iraq is counteracted by growing concern about declining global economies. The commodity traded at around $110.50 Friday morning.
Mixed messages out of Washington have increased investor doubt about the US government's ability to reach an agreement and avoid its upcoming ‘fiscal cliff'. Brent crude oil was pushed lower toward $110 due to concern that the number one oil consumer may be tipped into a recession come 2013. President Barack Obama made promising statements this week, claiming that he expected fiscal cliff talks to be completed before Christmas. However, according to CNBC, Speaker of the House John Boehner said Democrats and Republicans have made no progress toward reaching an agreement.
In Egypt, protests filled the streets of Cairo all week, as opponents to President Mohamed Mursi object to his decree that none of his decisions can be legally challenged. On Thursday, anti-Mursi demonstrators vowed to continue their protests as necessary until Mursi's sweeping powers were revoked. They also claimed that more civil disobedience would follow should the stalemate continue.
The nuclear program in Iran has continued to advance, even as the UN protests its expansion. Iran claims the development will be used to support nuclear energy, but U.S. intelligence has claimed they are constructing an atomic bomb. The U.S. Senate will likely add new sanctions to the country in an effort to reduce funding for the nuclear development program. Iran has already faced heavy sanctions, including on its oil sector.
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