Brent crude rose in Asian trading on increased fears that Iran will disrupt oil supplies in the Strait of Hormuz, contributing to a risk premium of $4-$5 per barrel according to some market commentators. Further moves in the oil price are likely to be driven by noise out of Brussels and Washington surrounding the extent of any sanctions imposed against Iran. Watch out for the EIA’s release of US crude inventories today at 3.30pm GMT. A survey by Bloomberg suggests crude inventories are likely to show a 1 million barrel increase.
Cotton prices continued to increase driven higher by fears over India’s cotton crop to the highest settlement price since mid-November. Prices fell to $0.85/lb in mid-December and since then have increased by 14%.
The BDI continued to decline yesterday on post Christmas/New Year slow down in demand.