Analysts at Citi have warned that oil prices are likely to continue rising due to the faltering US-Iran talks. The stalemate in negotiations has led to increased tensions in the Middle East, which could drive up crude oil costs. According to a report by Citi, oil prices are expected to grind higher as the situation remains unresolved.
The analysts at Citi pointed out that the current tensions in the region are a major factor contributing to the expected rise in oil prices. With the US and Iran at odds, the likelihood of increased military action or disruption to oil supplies is high, which would have a significant impact on the global oil market.
The FTSE 100 was down 0.2% to 7,494, while the FTSE 250 fell 0.1% to 21,344. The oil and gas sector was among the biggest losers, with shares in BP and Royal Dutch Shell down 1.3% and 1.5% respectively.
Analysts at Barclays said that the recent rise in oil prices is a 'clear sign' that the market expects a deterioration in the US-Iran relationship. They added that the situation is 'likely to get worse before it gets better', which could lead to a further increase in oil prices.
The impact of the US-Iran stalemate on oil prices is likely to be significant, particularly for UK investors and pension holders who have exposure to the oil and gas sector. With oil prices expected to rise, it is essential for investors to keep a close eye on the situation and adjust their portfolios accordingly.
While the exact timing and magnitude of the oil price increase are difficult to predict, one thing is certain: the stalemate in US-Iran talks is likely to have far-reaching consequences for the global oil market.