© Reuters. NYMEX crude oil jumps on Saudi-Iran row Investing.com – Crude oil prices gained smartly in Asia on Monday as Saudi Arabia cut diplomatic ties with Iran after a weekend storming of the Saudi embassy in Tehran in response to the kingdom’s execution of a prominent Shiite cleric.
On the New York Mercantile Exchange, crude oil for delivery in February jumped 2.08% to $ 37.84 a barrel.
The announcement was sent in an Arabic-language Twitter (N:) post by the Saudi Ministry of Foreign Affairs. “His excellency, Foreign Minister Adel al-Jubeir (of the) Saudi kingdom is announcing cutting diplomatic ties with Iran.” The practical effect on oil supplies was limited, however tension between the two countries is expected to escalate Islamic sectarian issues.
China is to publish its for December ahead with a forecast of 49 – still in contraction, but up from 48.6 previously. Japan also reports its for December.
In Australia, the came in at 51.9, in expansion, but down from 52.5 previously.
In the week ahead, investors will be looking ahead to Friday’s U.S. jobs report for December, as well as reports on U.S. manufacturing and service sector activity. Tuesday’s euro zone inflation report will also be in focus.
On Monday, in the euro zone, Germany is to release preliminary data on consumer inflation.
The U.K. is to release survey data on manufacturing sector activity.
In the U.S., the Institute of Supply Management is to release data on manufacturing activity
Last week. oil prices rose in light trade ahead of the New Year holiday on Thursday, but ended the year sharply lower as an unprecedented global supply glut continued to weigh on the market.
Oil prices have been hit by robust U.S. shale output and a decision by the Organization of the Petroleum Exporting Countries not to cut production, leaving members pumping crude at near record levels into an already oversupplied market.
The U.S. has also repealed a 40-year ban on exports to countries outside Canada and markets are bracing for the return of Iranian crude exports after Western sanctions against Tehran are lifted.
Data from the U.S. Energy Information Administration shows that inventories of crude oil in the U.S. stand near eight-decade highs.
In its weekly supply report released on Wednesday the EIA said crude oil stockpiles increased by 2.6 million barrels to 487.4 million barrels in the week to December 25, compared with expectations for a decline of 1 million barrels on the week.
In the week ahead investors will be looking ahead to supply data from industry group the on Tuesday ahead of Wednesday’s weekly on stockpiles.
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NYMEX crude up sharply as Saudi Arabia cuts diplomatic ties with Iran
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