(Reuters) – Attacks on Saudi oil plants have boosted concerns about supply security in the Middle East and should raise the risk premium in the global crude market, shifting focus from a gloomy economic backdrop, S&P Global Platts said on Sunday.
“The sudden change in geopolitical risk warrants not only an elimination of the $5-10 a barrel discount on bearish sentiment, but adds a potential $5-10 a barrel premium to account for now-undeniably high Middle Eastern dangers to supply and the sudden elimination of spare capacity,” it said in a note.
Prices - Barrel - Options - Fundamentals
“As such prices are likely to break out of the current $55-65 a barrel options range, to test the high $70s as currently supported by fundamentals.”
Prices could move higher still if Saudi output is curtailed for a more substantial period, the note’s author Chris Midgley, global head of analytics at S&P Global Platts, wrote. However, that is not its current assumption.
Industry - Source - Briefed - Developments - Reuters
An industry source briefed on the developments told Reuters on Sunday that Saudi Arabia’s oil exports will continue as...
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