During the Asian session on Friday (January 3), international oil prices rose sharply, and tensions in the Middle East increased after the United States launched air strikes. Tensions in the Middle East have increased after rocket attacks reportedly killed members of Iran-backed militia groups in Iraq. Whether the current defensive deployment will continue throughout the day may depend on any response from Iran. If the situation is under control, risk sentiment may be pushed aside when Wall Street resumes trading on Friday.
As the Iranian general was killed in an attack, the market was worried about supply disruptions caused by intensifying geopolitical tensions. The U.S. and Brent oil prices surged in the short term. The increase in U.S. oil once expanded to 4%. Brent crude oil futures rose during the day. An increase of more than 3%.
Trump is angry! Be wary of the continued deterioration of the geopolitical crisis in the Middle East
The Turkish Parliament overwhelmingly passed a bill allowing the deployment of troops in Libya, paving the way for further military cooperation between Ankara and Tripoli. The US military carried out air strikes in Iraq and Syria last weekend, and since then the Middle East has continued to face geopolitical risks.
On December 31, 2019 local time, U.S. President Trump tweeted: Iran is fully responsible for the attack on the U.S. Embassy in Iraq in Baghdad, the capital of Iraq, and Iran will Pay a heavy price. Trump said: This is not a warning, but a threat!
In response, U.S. Secretary of Defense Mark Esper said in a written statement that in view of the protests and demonstrations against the U.S. Embassy in Iraq that broke out in the Iraqi capital Baghdad, the U.S. military has dispatched special forces to protect them. Security at the U.S. Embassy in Iraq. Esper stressed that he hopes the Iraqi government will make every effort to protect the safety of US embassy personnel in Iraq.
In the early morning of January 3, local time, three rockets landed near the Baghdad International Airport in the Iraqi capital. The explosion killed at least 8 people and injured 12 Iraqi soldiers. According to reports, US officials confirmed that the attack on Baghdad Airport suspected to be related to Iran was carried out by the United States.
According to Al Arabiya TV, the deputy leader of the Shia militia Abu Mahdi · Muhandis died in a rocket attack in Baghdad that attacked the US Embassy. In addition, according to Al Arabiya TV and Sky News, General Qasem Soleimani, commander of the “Quds Force”, a special force affiliated with Iran’s Islamic Revolutionary Guard Corps, was killed in the Baghdad attack.
U.S. officials said that the additional 750 troops will be stationed in Kuwait initially, and a further 4,000 troops may be sent to the region in the next few days. More than 5,000 U.S. troops are stationed in Iraq to support local forces.
Iran’s Supreme Leader Ayatollah Ali Khamenei condemned the US attack on Wednesday. Iran summoned the Swiss envoy who represents U.S. interests in Iran to express dissatisfaction with the United States’ “warlike” remarks. At the same time, this air strike triggered calls within Iraq to expel these soldiers.
The U.S. strikes against Iran, igniting risk aversion
According to two people familiar with the matter, General Qassem Soleimani, the commander of the Quds Force of the Iranian Revolutionary Guards, has been in Killed in U.S. airstrike on Baghdad. The attack occurred near Baghdad International Airport. Details of the attack remained unclear, but one of the people said an Iraqi militia leader, Abu Mahdi al-Muhandis, was also killed.
As tensions between Tehran and Washington escalate, Iran looks certain to react strongly. Earlier in the evening, Iraqi security forces said in a statement that the airport was hit by rockets. Soleimani is a veteran of the Iran-Iraq war and a household name in Iran – he is highly regarded in Iran for helping defeat the Islamic State group in Iraq and Syria and largely keeping the group at bay. praise.
He has been subject to U.S. sanctions since 2007; last May, Washington designated the entire Revolutionary Guards as a foreign terrorist organization, the first time the label has been attached to a formal state agency or group. national security forces. Tensions between Iran and the United States began last week, when a rocket attack killed an American contractor at an Iraqi military base in Kirkuk. The attack in Baghdad marks the latest in a series of violent incidents that have heightened hostility between Iran and the United States
Foreign media reports say Iran may retaliate strongly for the killing of Iran’s most respected military figure Qassem Soleimani; Iran The most revered military figure, Qassem Soleimani, is emblematic and important in Iran, and it is best to prepare for any kind of Iranian retaliation against American diplomatic and military personnel in the region and around the world.
Conn. Democratic Senator Chris Murphy tweeted, “Did the United States assassinate Iran’s No. 2 figure without congressional authorization, knowing that this move could trigger a potential large-scale regional war?” ?” Analysts said that this move led to a more direct confrontation between the United States and Iran, and risk aversion suddenly increased, and the increase in U.S. oil once expanded to 4%.
U.S. stock indexes hit new highs on the first trading day of the new year
U.S. stocks rose on the first trading day of the new year, continuing strong gains across many asset classes in 2019 momentum. Investors cheered China’s central bank’s latest policy moves to support the economy. U.S. Treasuries and the dollar strengthened.
The S&P 500 rose 0.8% to a record high, one of the best starts for U.S. stocks in the past decade, but the first dayThe current situation has almost no impact on the full-year trend. After a stellar 2019 for most major assets, the focus now turns to the new year.
Kevin Caron, senior portfolio manager at Washington Crossing Advisors, said, “Towards the end of last year, there was a momentum-type rally driven by good liquidity, and this momentum itself continued.”
As of the close of U.S. stocks on Thursday, the S&P 500 index rose 0.8% to 3257.90 points, a record high, the largest increase in three weeks; the Dow Jones Industrial Average rose 1.2% to 28,869.14 points, the highest level on record , and achieved its largest gain in nearly four weeks; the Nasdaq Composite Index surged 1.3% to 9,092.19 points, the highest level on record, and achieved its largest gain in nearly 12 weeks.
The trend of oil prices in 2020 is stalemate
Amid geopolitical tensions and major production Under the combined influence of factors such as the extension of oil production reduction agreements by oil countries, international crude oil prices rose sharply in 2019. Looking forward to 2020, the international crude oil market is expected to be in a state of tug-of-war between long and short, with uncertainties on both the supply and demand sides, and the trend of oil prices is unpredictable.
In the new year, international oil prices will still be affected by multiple factors. On the supply side, OPEC+ oil-producing countries recently announced the latest production reduction plan, but its effect remains to be seen. The organization announced in early December 2019 that it would increase crude oil production cuts from 1.2 million barrels per day to 1.7 million barrels per day in the first quarter of 2020. Saudi Arabia and other countries will continue to voluntarily implement additional production cuts.
Alexander Kozul-Wright of Capital Economics believes that OPEC’s decision to deepen production cuts will put the oil market into a supply shortage in early 2020. The International Energy Agency (IEA) predicts that U.S. oil production growth will drop to 1.1 million barrels per day in 2020 from 1.6 million barrels per day this year.
The growth rate of U.S. oil production has been declining. Oil producers have reduced the number of operating oil rigs for the fourth consecutive quarter, the first time since 1999. U.S. West Texas Intermediate Oil ( WTI) crude oil futures are expected to average $57.70 a barrel in 2020, up from $57.30 expected last month. Oil demand is expected to grow by 900,000 to 1.4 million barrels per day in 2020, as signs of trade optimism bring a glimmer of optimism to the battered global economy.
However, many market analysts still believe that this increase in production cuts will have limited benefits to oil prices.
UBS Global Wealth Management released a report saying that whether the production cuts can be fully implemented depends on oil-producing countries such as Iraq and Nigeria that have not performed well in previous production reduction agreements. Whether OPEC production cuts can successfully provide support for oil prices Still doubtful.
Austria’s JBC Energy Company believes that the new production reduction cannot be interpreted as an effective change in the market equilibrium, because it is more of a move to improve the implementation of the production reduction agreement. In addition, Saudi Arabia is also trying to let other countries share its burden. Excessive production reduction burden.
It is worth noting that OPEC+ has not yet decided what to do after the production reduction agreement expires in March 2020, which has planted uncertainties for global crude oil supply in 2020.
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