By David Berman
Crude oil is back to where it started the year, below $100 (U.S.) a barrel – and the rise-and-retreat seems to have less to do with the global economic backdrop than it does with shifting views on Iran. Crude began 2012 at $98.83, then jumped as high as $103.22 a barrel – the highest level since May, 2011 – on threats to impose an embargo on Iranian oil (not to mention a counter-threat from Iran to block the Strait of Hormuz.
Now, Bloomberg News reports that the embargo threat from the European Union could be delayed for six months. From Bloomberg: “Crude fell 1.8 per cent on the postponement that will allow countries such as Greece, Italy and Spain to find alternative supplies, according to an EU official with knowledge of the talks.”
Oil closed in New York at $99.10 a barrel, down $1.77. With the retreat, its year-to-date gain has been clipped to just 27 cents. At least Canadian energy stocks seem to be correlated: The S&P/TSX energy subindex is up 0.2 per cent this year.