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U.S. Oil Prices Once Again Causing Concern

After retreating more than $1, U.S. oil prices are once again considered to be a burden for consumers. Oil is currently more than $100 per barrel and economists fear that this combined with other economic factors could force the global economy right into recession.

IEA is said to be keeping a close watch on oil prices although it is not currently known whether or not the agency will release an emergency share of oil stocks. Oil futures reached their highest peak since May this past month and crude prices reached almost $118 per barrel. As they typically do however, these prices fell just a bit after the official comment released by the IEA.

Some cause for concern is the Iran sanctions amendment to the National Defense Authorization Act of 2012 which grants only 20 countries exemptions from receiving highly reduced Iranian oil. Among these countries are India, Japan, South Korea and China. Whether or not those exemptions are going to be renewed has not yet been determined. The U.S. government could very well tighten its sanctions against Japan as well as China, South Korea and India while also pleading with the SPR to lower prices. In effect, those watching these numbers carefully are simply waiting for the worst to happen.

With the increased tensions through various Muslim countries, this could grow much worse before it gets better. Traders are actively watching the developments in that area of the world in spite of the protests and violent activities currently happening in Yemen, Egypt, Sudan and other regions of the Middle East and Northern Africa. Many economists are fully expecting an action on crude oil prices to happen any day. Most are apprehensive of just what will happen and how that action is going to further affect the economy in the U.S. and on a more global scale.

14.09.2012. 17:00