Crude oil is trading at a four-month high as tensions between the U.S. and Iran escalate.
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West Texas Intermediate (WTI) crude oil, the U.S. benchmark, is trading at $62.97 a barrel, while Brent crude, the international standard, is trading at $68.12 per barrel, both at four-month highs. The rise in crude prices comes after U.S. President Donald Trump threatened to attack Iran, urging Tehran to negotiate a nuclear deal with America.
“Hopefully Iran will quickly ‘Come to the Table’ and negotiate a fair and equitable deal,” Trump said in a social media post, adding that “the next attack will be far worse!” than the one that took place last year when America bombed Iranian nuclear facilities. Tensions between Washington, D.C. and Tehran have intensified as Iran’s government cracks down on pro-democracy demonstrators.
Oil Price Premium
Energy analysts say that a potential disruption to Iran’s oil supplies has injected a premium into crude prices and led futures to rise to start the year, up more than 10% this month. The current rise in oil prices comes despite widespread forecasts of a glut around the world this year.
Across the Middle East, there’s been regional reaction to Trump’s escalating threats to attack Iran. The Iranian and Qatari foreign ministers have stressed the need to continue diplomatic efforts to reduce tensions, while Saudi Arabia’s Crown Prince has said that the Kingdom’s land won’t be used to carry out strikes against Tehran.
Analysts see the price of crude oil continuing to rise until the situation in Iran is resolved. The current increase in prices is helping to buoy the stocks of leading oil companies such as Chevron (CVX), ExxonMobil (XOM), and Occidental Petroleum (OXY).
Is CVX Stock a Buy?
The stock of Chevron has a consensus Strong Buy rating among 20 Wall Street analysts. That rating is based on 16 Buy and four Hold recommendations issued in the last three months. The average CVX price target of $179.90 implies 5.97% upside from current levels.
