Traders following the price of oil might have noticed that earlier today the value of this instrument registered a sharp increase. This is due to an unforeseen shock regarding oil: the Gordon hurricane is headed for the Gulf of Mexico, which caused two major oil rigs to be closed down in preparation for today and fully evacuated.
Over the past couple of weeks there has been a gradual decrease in oil supply. This is the result primarily of the restoration of sanctions against Iran by the United States (due to cancelling the nuclear deal with Iran), as well as the continuing crisis in Venezuela, and now the expected severe storm that is interrupting regular supply.
Investors are unsure how the curbed supply will affect prices in the days to come. Typically, less supply increases prices, so some have suggested that we might see oil hit the $80 mark. Yet the worsening of the trade relations between the United States and China could drive demand down, which would decrease prices again.
