Oil prices tick up after Iran seizes Iraqi oil vessel
Oil prices (CL=F, BZ=F) move higher after Iran reportedly seized a vessel carrying Iraqi oil that was heading toward Turkey. Iran state media reported: "After the theft of Iranian oil by the United States last year, St. Nikolas tanker was seized by Iran's Navy this morning with a judicial order ... it is en route to Iranian ports."
In response to the seizure, White House National Security Spokesperson John Kirby said there's "no justification whatsoever to seize it, none whatsoever. They need to let it go."
Yahoo Finance Reporter Ines Ferré joins the Live show to discuss what it means for the price of oil and geopolitical tensions, also discussing the impact of the deal between Chesapeake Energy (CHK) and Southwestern Energy (SWN) on US natural gas production.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Editor's note: This article was written by Nicholas Jacobino.
Video Transcript
[AUDIO LOGO]
JULIE HYMAN: Oil prices higher today as tensions persist in the Middle East. For more on this, let's bring in Inés Ferre who's watching those oil prices. Hi, Ines.
INES FERRE: Hi, Julie. Yeah, and we saw WTI go up more than 3% during today's session, then paring back some of those gains. And you had Brent Crude that was up more than 2.5%.
This was because of a report that Iran had seized a vessel carrying Iraqi oil that was headed towards Turkey. And Iranian state media saying that they seized that vessel because it was the same vessel that the US had confiscated last year. So this was in retaliation.
But, of course, what this does is it stokes concerns, fears of escalated tensions in the Middle East. And we have seen days where we have seen oil spike by 2%, 3% because of tensions in the Red Sea area. This was in the Middle East as well.
Now, as far as oil prices are concerned, there is a cap that we are seeing when it comes to the oil prices and these temporary spikes that we see during some of these sessions. And most analysts are saying that this has to do with supply, increased supply from the US and others coming into the market this year. And in fact, you had just had Barclays that reduced its price target on Brent by $8 per barrel to $85 per barrel, partly because of increased supply, guys.
JOSH LIPTON: And, Ines, I also wanted to get your take on a big deal we heard about today. Chesapeake and Southwestern Energy, what can you tell us about that one?
INES FERRE: Yeah, so this will combine both companies and it will become one of the biggest companies in the energy space, in the natural gas space, ranking as one of the largest natural gas producers in the US. There is a growing need for natural gas, a growing need for liquefied natural gas, which the US has been exporting more and more abroad. So this company will have a new name. We don't know what the new name is going to be. They will build a new facility also in Houston.
But look, as far as natural gas prices are concerned, we have seen that they have been on this downward trend. They're up a bit more now. But as far as this year is concerned because of demand for natural gas, demand for natural gas also for the green energy initiative. The analysts are expecting prices to go higher.
JOSH LIPTON: Ines, thank you so much for that. Appreciate it.
INES FERRE: Thank you.
