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Unexpected and disturbing rise of geopolitical tensions

Published Friday, July 18th, 2014

Market players arrived at their offices yesterday morning keen to learn if Libyan oil production is still rising, if Israeli/Palestinian tensions was easing and whether the latest US economic releases would support sentiment. Although the latter ended up attracting little attention, the figures were generally encouraging. Jobless claims unexpectedly fell during the latest week, housing starts slipped in June and Philly Fed factory activity surged during July. They were also eager to find out the potential impact of the fresh EU/US sanctions against Russia. These were all genuine and valid concerns regarding share and oil prices although no-one could have anticipated the tragic events that were about to unfold.

We were told by the Ukrainian military during the European morning that a Russian jet downed a Ukrainian warplane over its territory. Whilst this invariably led to an escalation of the crisis, what followed next was unprecedented. A Malaysian airliner was downed over the territory of the former Soviet republic leaving all 298 people on board, amongst them American, Dutch, German, Australian, British and French citizens, dead.

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Posted by Tamas Varga

Tamas Varga has been in the oil industry since 1992 and with PVM for 18 years. During his time in the industry he has gathered a range of experience in the oil markets. At PVM Tamas is in charge of data collection and analysis.