Cooling Relations With Iran Could Pop Oil Bubble

Brent crude prices have been on an upswing in recent months, and most people assume this is because of rising tensions in Libya and continuing problems in Nigeria. However, Saudi Arabia has increased production to keep supply stable, so the supply risk premium seems to largely be a product of investors speculating on oil futures. “We believe that current oil prices are not supported by market fundamentals, but driven by speculation about potential disruption in Middle East oil exports,” write Oppenheimer analysts Fadel Gheit and Robert Du Boff. “As a result, we expect oil prices to remain inflated until Iran’s…