Oil investments advance as EU enacts Iranian embargo

Crude oil prices sold higher on global charts today after reports hit the sector that the European Union agreed to enact a full embargo on Iranian oil being imported into the region. Oil investments rose in both Brent and West Texas Intermediate, as the embargo stipulated that all new contracts would be terminated, while existing contracts would end by July 1st.

WTI’s March figures rose 85 cents to $99.18 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude oil prices for March settlement gained 79 cents and settled at $110.65 per barrel on the ICE Futures Exchange in London.

The prolonged deadline set for existing contracts managed to cool off some of the enthusiasm and stunted the full expected rise of oil investments. EU’s agreement will also see the bloc ban all transaction of Iran’s Central Bank, as well bar all petrochemical products from the OPEC nation from entering the region. More details of the embargo and an official report are expected to surface later in the day’s investment news.

Both traders and analysts have stated however, that the pre-existing optimism surrounding the embargo had already taken its toll on the charts, and that little else will take place as far as upturn go for oil investments. Instead, old-standing concerns regarding the sinking economy in Greece will likely take over the sector’s sentiment. The nation’s negotiations with its creditors are expected to yield results later in the week.

Against pessimistic odds given the situation in the EU, the euro managed to advance against the dollar on the currency index, giving crude oil another line of support. Oil prices in general tend to fluctuate upwards whenever the greenback retreats on the charts, as foreign traders gain an interest in the fuel.

Yet overall, crude’s shift upwards proved neither as dramatic nor as effective as first expected.

By Chris Termeer