Oil price shock remains a 'risk' as global fuel supplies reach critically low levels | The Business

By ABC News (Australia)

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Subscribe: http://ab.co/1svxLVE Volatility has continued in the oil market. Oil futures reached a $US80.50 per barrel on Thursday (US time) but later fell back. Analysts say this suggests that market optimism is slanted towards the tit-for-tat US-Iran fighting being only minor in nature, rather than a complete breakdown of the diplomatic process. CommSec equity market strategist James Gruber says a safe passage through the Strait of Hormuz for ships remains critical for the oil market and time is running out for it to be officially opened to all traffic before the oil price spikes higher. "So it's logical that oil goes up because obviously there are fears that Iran will close or partially close the Strait of Hormuz." He added, "if the Strait of Hormuz closes (completely), how long can developed nations, including Australia, last without that oil is the big question. And some analysts suggest, you know, it could be four to six weeks before we start having to do things like rationing."

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