The ongoing conflicts in the middle east seem to be getting bigger. In fact, the latest reports put a U.S.-owned cargo ship in the line of fire. The move proved a less-than-welcome update for U.S. crude oil (CM:CL) prices, though, as they were down fractionally in Monday afternoon’s trading.
The reports noted that the cargo ship had been hit by a missile while transiting the coast of Yemen. Heading through the westbound lane of the International Recommended Transit Corridor, a route through the Gulf of Aden, brought the vessel in range of the Yemeni missile fire. However, reports also note that the damage the missile caused was somewhat limited in scope and ultimately resulted in a fire in a cargo hold. There were no injuries, and the ship could continue on. The move sparked immediate retaliatory gestures, as several airstrikes hit Yemen immediately after, targeting the Houthi in the region.
A Flashpoint with Wider Implications
Right now, things are reasonably good as far as fuel consumption goes. While colder weather has us burning more natural gas, winter blend fuel is generally available at a lower cost. But with summer travel season just a few months away—along with more expensive summer blend fuels—the prices could go racing back up again in short order. A spreading Middle East conflict might also send crude prices steadily upward.
Is U.S. Crude Oil a Good Buy Right Now?
A look at the last month in trading for U.S. crude shows it up fractionally. However, it’s down 8.94% over the last year, after a particularly volatile 12-month period that saw prices for a barrel bounce between the mid-$60 level all the way up to just over $90.
