Citigroup: the surge in international oil prices is bad for the risk of global stagflation
On Monday (May 14) of citigroup economists warned that the price of crude oil in recent months a sharp rise, which might be for global investors to create a "very bad environment.
In the past two years, the price of crude oil has been rising and increased from $26 a barrel in 2016 to $77 a barrel on Monday, the reason was that the crude oil market supply and demand has been steadily tightening.The rise in crude oil prices has also contributed to earnings growth for some companies.In the past month, several oil and gas producers and refiners have been among the biggest gainers on Wall Street.
Citigroup to marc scarltet field (Mark Schofield), led by a global strategy team wrote in a research report published on Monday, the President of the United States but trump decided to pull out of Iran's nuclear agreement last week, it has become a major part of the geopolitical shift factors, could trigger "stagflation".
The bank said, decline in global economic growth speed, and rapidly rising inflation - also known as stagflation - will likely to create a "very hostile environment" for risk assets.
With a broader regional conflict upgrade, citigroup economists into, oil prices continue to rise, and less than the expected global economic growth data may produce force, increase the risks of financial market participants.
Last week, Mr Trump announced his withdrawal from Iran's nuclear deal and promised to impose further sanctions on Iran.The controversial decision is largely alien to the international community and has sparked anxiety in the Middle East.
Iran produces about 4 percent of the world's crude oil production, and the likely U.S. sanctions will reduce Iran's oil supply.
Iran's oil exports fell to about 1.5m b/d in 2012 when the us government under President barack Obama imposed sanctions on Iran.Since the export sanctions were lifted in 2015, Iran's crude oil exports have risen by more than a million barrels a day.
Most analysts expect U.S. sanctions to affect Iran's crude supply later this year, especially compared with the Obama administration's 2012 sanctions against Iran.Analysts said trump out of Iran's nuclear agreement may reduce Iran's oil exports 300000 barrels per day to 300000 barrels a day, far less than the compared with six years ago fell 1 million barrels per day to 1.5 million barrels a day.
OPEC, Russia and several other coalition oil producers reached a deal to cut production at the end of 2016, trying to clear the glut of global supplies and push up prices.The deal, which takes effect in January 2017, will expire at the end of the year.Major oil producers are expected to reassess the agreement at a meeting in June.