Hassan Rouhani, the first Iranian leader in a decade to visit Davos for the World Economic Forum, invited oil companies to invest in his country as a nuclear accord with world powers triggers the lifting of some sanctions.
Syria sizzles, Iran gets a new President and oil soars to a nine-month high. Welcome to risk premiums that seems to be back in the oil market despite the fact that North Korea is asking for a handout.
The Brent-WTI spread continued to widen due in part to the growing U.S. oil glut but also because of an increase in the geo-political risk trade. Iran dashed hopes that there might actually be progress with the Iranian nuclear soap opera.
If traders believe that the Iran sanctions are starting to work perhaps forcing a change in the power structure of the regime, it is very possible that the possibility of an attack on Iran is diminishing.
While tensions seem to be easing over Iran after their temper tantrum in the Straits of Hormuz, the oil market now is focused on growing tensions in the North Sea.
